None 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
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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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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
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