Business, 12.06.2020 02:57 pxrnstar4613
Pennewell Publishing Inc. (PP) is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $80,000. PP's current cost of equity is 10%, and its tax rate is 40%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. Refer to the data for Pennewell Publishing Inc. (PP). Assume that PP is considering changing from its original capital structure to a new capital structure with 35% debt and 65% equity. This results in a weighted average cost of capital equal to 9.4% and a new value of operations of $510,638. Assume PP raises $178,723 in new debt and purchases T-bills to hold until it makes the stock repurchase. PP then sells the T-bills and uses the proceeds to repurchase stock. How many shares remain after the repurchase, and what is the stock price per share immediately after the repurchase?
Answers: 1
Business, 22.06.2019 11:30
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Business, 22.06.2019 18:00
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Business, 23.06.2019 02:00
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Business, 23.06.2019 02:00
When making a major purchase, i often spend months to learn all the issues?
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Pennewell Publishing Inc. (PP) is a zero growth company. It currently has zero debt and its earnings...
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