Schwartz Industry is an industrial company with 113.4 million shares outstanding and a market capitalization (equity value) of billion. It has $1.61 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?
b. Suppose you are a shareholder holding 100 shares, and you disagree with this decision. Assuming a perfect capital market, describe what you can do to undo the effect of this decision.
Schwartz Industry is an industrial company with 113.4 million shares outstanding and a market capitalization (equity value) of $4.09 billion. It has $1.61 billion of debt outstanding. Management have decided to delever the firm by issuing new equity to re
Toby Industries has 75 million shares outstanding and a market capitalization of $2.00 billion. It also has $775 million in debt outstanding. Toby Industries has decided to delever the firm by issuing new equity and completely repaying all the outstanding debt. Assume perfect capital markets. Suppose you are a shareholder in Toby industries holding 150 shares, and you disagree with this decision to delever the firm. You can undo the effect of this decision by Select one: A. borrowing $1000...
A firm has a market capitalization (market value of equity) of $30 Billion and net debt of $4 Billion. Calculate the weight of debt in the firm's weighted average cost of capital (WACC) calculation.
A firm has a market capitalization (market value of equity) of $11 Billion and net debt of $3 Billion. Calculate the weight of equity in the firm's weighted average cost of capital (WACC) calculation.
Calculate the net debt of a firm with a market capitalization ( market value of equity) of $49 Billion, market value of debt of $22 Billion, and $7 Billion in cash and equivalents. [Note: Enter your answer in Billions; for example, if you calculate the net debt to be $10 Billion, then enter just 10 in the answer box.]
A firm has a market capitalization (market value of equity) of $25 Billion and net debt of $15 Billion. Calculate the weight of debt in the firm's weighted average cost of capital (WACC) calculation. [Note: Enter your answer as a percentage rounded to two decimal places.]
A firm has a market capitalization (market value of equity) of $19 Billion and net debt of $11 Billion. Calculate the weight of equity in the firm's weighted average cost of capital (WACC) calculation. [Note: Enter your answer as a percentage rounded to two decimal places.]
Company A currently has market capitalization (value of its equity) of $9,062.49 million, a debt-equity ratio of .1822, and a WACC of 4.65%. The government of the country in which Company A operates, Utopia, has no corporate taxes (T=0). The Firm has decided it’s a good time to restructure its capital. It will buy back some of its debt and issue new equity to achieve the industry-average debt-equity ratio of 0.54. What will the Company’s weighted average cost of capital...
Question 11A firm has a market capitalization (market value of equity) of $16 Billion and net debt of $12 Billion. Calculate the weight of debt in the firm's weighted average cos of capital (WACC) calculation. (Note: Enter your answer as a percentage rounded to two decimal places.] Question 12A firm has an effective (after-tax) cost of debt of 3%, and its weight of debt is 40%. Its equity cost of capital is 9%, and its weight of equity is 60%. Calculate...
EJH Company has a market capitalization of $2.4 billion and 45 million shares outstanding. It plans to distribute $ 105 million through an open market repurchase. Assuming perfect capital markets: a. What will be the price per share of EJH right before the repurchase? b. How many shares will be repurchased? c. What will be the price per share of EJH right after the repurchase?
Zetatron is an all-equity firm with 260 million shares outstanding, which are currently trading for 24.18 per share. A month ago, Zetatron announced it with a change its capital structure by borrowing 943 million in short term debt, borrowing 1,036 million in long-term debt, and issuing 813 million of preferred stock. The 2,792 million raised by these issues, plus another 73 million in cash that Zetatron already has, will be used to repurchase existing shares of stock. The transaction is...