6. The firm is currently an all-equity firm with assets worth $120 million and 10 million shares outstanding. The firm plans to borrow $60 million and use these funds to repurchase shares. The firm's marginal corporate tax is 21%, and it plans to keep its outstanding debt equal to $60 million permanently. What is the lowest price per share the firm can offer and have shareholders tender their shares? A) $1.26 B) $7.26 C) $8.26 D) $12.0 E) $13.26

6. The firm is currently an all-equity firm with assets worth $120 million and 10 million shares outstanding. The firm plans to borrow $60 million and use these funds to repurchase shares. The firm's marginal corporate tax is 21%, and it plans to keep its outstanding debt equal to $60 million permanently. What is the lowest price per share the firm can offer and have shareholders tender their shares? A) $1.26 B) $7.26 C) $8.26 D) $12.0 E) $13.26

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter14: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 12P

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