Brealey Corporation is currently all equity financed and has a value of $95 million. Investors currently require a return of 14.20 percent on common stock. Brealey pays no taxes. Brealey plans to issue $35 million of debt with a return of 4.1 percent and use the proceeds to repurchase common stock. What will be the value of the firm after the debt issue? Please state your answer in millions. Enter your response below. 95 Correct response: 95million This question has 4 parts, so you will be clicking verify 4 times. Given that the firm will still have a value of $95 million, what will be the value of the equity after the debt issue? Please state your answer in millions. Enter your response below. Number million
Brealey Corporation is currently all equity financed and has a value of $95 million. Investors currently require a return of 14.20 percent on common stock. Brealey pays no taxes. Brealey plans to issue $35 million of debt with a return of 4.1 percent and use the proceeds to repurchase common stock. What will be the value of the firm after the debt issue? Please state your answer in millions. Enter your response below. 95 Correct response: 95million This question has 4 parts, so you will be clicking verify 4 times. Given that the firm will still have a value of $95 million, what will be the value of the equity after the debt issue? Please state your answer in millions. Enter your response below. Number million
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Brealey Corporation is currently all equity financed and has a value of $95 million. Investors currently require a return of 14.20 percent on common stock. Brealey pays no taxes. Brealey plans to issue $35 million of debt with a return of 4.1 percent and use the proceeds to repurchase common stock. What will be the value of the firm after the debt issue? Please state your answer in millions. Enter your response below. 95 Correct response: 95million This question has 4 parts, so you will be clicking verify 4 times. Given that the firm will still have a value of $95 million, what will be the value of the equity after the debt issue? Please state your answer in millions. Enter your response below. Number million
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