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
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation
Section: Chapter Questions
Problem 9MC
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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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