Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 16, Problem 5P

Stock Price after Recapitalization

Lee Manufacturing’s value of operations is equal to $900 million after a recapitalization. (The firm had no debt before the recap.) Lee raised $300 million in new debt and used this to buy back stock. Lee had no short-term investments before or after the recap. After the recap, wd = 1/3. The firm had 30 million shares before the recap. What is P (the stock price after the recap)?

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Please Solve this Question i need answer what is the earning per share after the repurchase ?
Net income for the year is  $ 45 million.What Price would you expect to pay if you bought the stock prior to ex dividend date ?on or after the dividend date?
A firm’s value of operations is equal to $800 million after arecapitalization. (The firm had no debt before the recap.) Thefirm raised $200 million in new debt and used this to buy backstock. The firm had no short-term investments before or after therecap. After the recap, wd = 25%. The firm had 10 million sharesbefore the recap. What is S (the value of equity after the recap)?($600 million) What is PPost (the stock price after the recap)?($80/share) What is nPost (the number of remaining shares afterthe recap)? (7.5 million)
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