Please solve The Green Briar is an all-equity firm with atotal market value of $418,000 and 20,000shares of stock outstanding. Management isconsidering issuing $120,000 of debt at aninterest rate of 9 percent and using theproceeds on a stock repurchase. Ignoretaxes. How many shares will the firmrepurchase if it issues the debt securities?A. 2,871 sharesB. 3,516 sharesC. 3,921 sharesD. 4,607 sharesE. 5,742 shares

Step 1: The calculation of the shares repurchased AB1Total market value $418,0002Shares…

Answered: The Green Briar is an all-equity firm…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 11P

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Consider this example: Shares of Ex Why Zee, Inc. (ticker symbol: XYZ) are currently trading at $6 per share. XYZ plans to issue $6M in short term debt and use the money they borrow to repurchase $6M worth of their own stock. What effect will the debt issuance and share repurchase have on the balance sheet? There isn't enough information to answer this question Assets will increase by $6M Liabilities will decrease by $6M Number of Shares Outstanding will increase by 1 million Equity will decrease by $6M
The Sweet Melon Corp. has total 100 shares trading on the market at $20 each.The book value of the total equity is $3500.The total market value of debt issurance is $4000.The expected return on total assets is 15% and the expected return on debt is 10%.What is the estimated return on equity? A.17.5% B.25% C.None of the choices D.18.3
A company has the following balance sheet (market values): Liabilities + Equity Debt Equity Assets Cash Operating Assets 600 1000 400 1200 If the firm has 110. find the # of outstanding shares remaining after it repurchases 120 worth of shares: (round your answer to the nearest 0.01)
The Greenbriar is an all-equity firm with a total market value of $551,000 and 21,700 shares of stock outstanding. Management is considering issuing $153,000 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? Multiple Choice • 49,590 shares • 542 shares 6,026 shares 6,695 shares 7,304 shares
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Assume JUP has debt with a book value of $20 million, trading at 120% of par value. The firm has book equity of $26 million, and 2 million shares trading at $19 per share. What weights should JUP use in calculating its WACC? O A. 30.97% for debt, 69.03% for equity O B. 34.84% for debt, 65.16% for equity O C. 38.71% for debt, 61.29% for equity O D. 27.1% for debt, 72.9% for equity
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1.Unikai company LLC have some surplus funds for a short period of time which they want to invest in some short-term securities. Which of the following is not an appropriate source for the company? a.All of these b.Commercial paper c.Equity shares d.Treasury bills 2.In Muscat SAOG company, there are 400000 shares and the management declared OMR 800000 as net profit. What would be the earning per share? a. OMR 5 b. None of the options c. OMR 4 d. OMR 2
Note:- You are attempting question 2 out of 12 Using the following information calculate the WACC of Aqua Ltd. The company has 0.3 million shares outstanding at a price of $92 per share. The beta of common stock of is 1.2. The risk-free rate is 5% and the market risk premium is 7%. The company issued 11% preference shares with a total value of $ 25 million. The company issued 9% bonds of $33.6 million. The company pays corporate tax at 40 percent. A. 9.59% B. 9.89% С. 10.99% D. d.8.35% A Answer D
a Des 2. MV Corporation has debt with market value of $100 million, common equity with a book value of $100 million, and preferred stock worth $20 million outstanding. Its common equity trades at $50 per share, and the firm has 6.0 million shares outstanding. What weights should MV Corporation use in its WACC? The debt weight for the WACC calculation is %. (Round to two decimal places.) The preferred stock weight for the WACC calculation is decimal places.) %. (Round to two The common equity weight for the WACC calculation is decimal places.) %. (Round to two

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