Question

In: Finance

The Greenbriar is an all-equity firm with a total market value of $596,000 and 23,200 shares...

The Greenbriar is an all-equity firm with a total market value of $596,000 and 23,200 shares of stock outstanding. Management is considering issuing $213,000 of debt at an interest rate of 9 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities?

Solutions

Expert Solution

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

XYZ, Inc., is an all-equity firm with a total market value of $729,000 and 47,300 shares...
XYZ, Inc., is an all-equity firm with a total market value of $729,000 and 47,300 shares of stock outstanding. Management believes the earnings before interest and taxes (EBIT) will be $95,400 if the economy is normal. If there is a recession, EBIT will be 30 percent lower, and if there is a boom, EBIT will be 40 percent higher. The tax rate is 35 percent. What is the EPS in a boom?
The Greenbriar is an all equity firm with a total market value of 536,000 and 21,200...
The Greenbriar is an all equity firm with a total market value of 536,000 and 21,200 shares of stock outstanding. Management is considering issuing 133,000 of debt at an interest rate of 9 percent and using the proceeds on a stock repurchase. How many shares will the firm repurchase if it issues the debt securities?
Cross Town Cookies is an all-equity firm with a total market value of $710,000. The firm...
Cross Town Cookies is an all-equity firm with a total market value of $710,000. The firm has 46,000 shares of stock outstanding. Management is considering issuing $155,000 of debt at an interest rate of 7 percent and using the proceeds to repurchase shares. Before the debt issue, EBIT will be $62,600. What is the EPS if the debt is issued? Ignore taxes. rev: 06_14_2019_QC_CS-170956 Multiple Choice $1.56 $1.26 $1.44 $.98 $1.66
Southern Wind is an all-equity firm with 26,500 shares of stock outstanding and a total market...
Southern Wind is an all-equity firm with 26,500 shares of stock outstanding and a total market value of $376,000. Based on its current capital structure, the firm is expected to have earnings before interest and taxes of $38,000 if the economy is normal, $23,600 if the economy is in a recession, and $52,400 is the economy booms. Ignore taxes. Management is considering issuing $95,200 of debt with an interest rate of 6 percent, if the firm issues the debt, the...
Hastings Company is currently an all equity firm with a total market value of $16,500,000 with...
Hastings Company is currently an all equity firm with a total market value of $16,500,000 with 1,200,000 shares of stock outstanding. The firm has expected EBIT of $1,380,000 if the economy is normal and $1,870,000 if the economy booms. The firm is considering a $4,500,000 bond issue with an attached interest rate of 6 percent. The bond proceeds will be used to repurchase shares. Ignore taxes. What will the earnings per share be after the repurchase if the economy is...
Divido Corporation is an all-equity financed firm with a total market value of $100 million. The...
Divido Corporation is an all-equity financed firm with a total market value of $100 million. The company holds $10 million in cash equivalents and has $90 million in other assets. There are 1,000,000 shares of Divido common stock outstanding, each with a market price of $100. What would be the impact on Divido's stock price, market value, outstanding shares, and on the wealth of its shareholders? Of the payment of a cash dividend of $10 per share? If the company...
An all-equity firm is subject to a 30% corporate tax rate. Its total market value is...
An all-equity firm is subject to a 30% corporate tax rate. Its total market value is initially $3,500,000. There are 175000 shares outstanding. It announces that it will issue $1 million of bonds at 10% interest and uses the proceeds to buy back common stock (Assume no change in costs of financial distress) a. what will happen to the market value of equity at the announcement of the share repurchase? b. How many shares can the firm buy back with...
Greenwich Company is an unlevered firm with a total market value of $25,600,000 with 1,200,000 shares...
Greenwich Company is an unlevered firm with a total market value of $25,600,000 with 1,200,000 shares of stock outstanding. The firm has expected EBIT of $1,800,000 if the economy is normal and $2,650,000 if the economy booms. The firm is considering a $5,000,000 bond issue with an attached interest rate of 6.2 percent. The bond proceeds will be used to repurchase shares. Ignore taxes. What will the earnings per share be after the repurchase if the economy booms? $2.30 $2.67...
MM Inc. is an all-equity firm (the firm value equals the value of equity). As the...
MM Inc. is an all-equity firm (the firm value equals the value of equity). As the CEO of MM Inc., you are considering purchasing a private jet for the firm. The private jet costs $12 million today and will save $2 million (in today’s value) on travel expenses for the firm over its life. You own 1% of MM's equity ownership. The private benefits of the private jet to you are estimated to be $800,000 in today’s value. Suppose you...
MM Inc. is an all-equity firm (the firm value equals the value of equity). As the...
MM Inc. is an all-equity firm (the firm value equals the value of equity). As the CEO of MM Inc., you are considering purchasing a private jet for the firm. The private jet costs $12 million today and will save $2 million (in today’s value) on travel expenses for the firm over its life. You own 1% of MM's equity ownership. The private benefits of the private jet to you are estimated to be $800,000 in today’s value. Suppose you...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT