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photoshop1234 [79]
3 years ago
13

Schwartz Industry is an industrial company with 100 million shares outstanding and a market capitalization (equity value) of $4

billion. It has $2 billion of debt outstanding. Management have decided to delever the firm by issuing new equity to repay all outstanding debt.
a) How many new shares must the firm issue?

b1) Suppose you are a shareholder holding 100 shares, and you disagree with this decision. Assuming a perfect capital market, how much should you borrow to hold the same amount of levered equity?

b2) How many new shares should you buy?
Business
1 answer:
Fudgin [204]3 years ago
6 0
I have to think again about this answer. I will get back! 2.22
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CaHeK987 [17]

Answer:

= 7.678%

Explanation:

Data provided

Risk free rate = 6.5%

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Marker return rate = 10.3%

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Expected return = Risk free rate + Beta × (Marker return rate - Risk free rate)

= 6.5% + 0.31 × (10.3% - 6.5%)

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3 years ago
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What must net noninterest income (net of noninterest expense) be in order for fnb to have a 12% roe? based on your answer, must
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Fantom [35]

Answer:

Answer to the following question is as follows;

Explanation:

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5 0
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