question archive Myers Corporation is currently all equity financed and has a value of $70 million
Myers Corporation is currently all equity financed and has a value of $70 million
Subject:FinancePrice: Bought3
Myers Corporation is currently all equity financed and has a value of $70 million. Investors currently require a return of 12.60 percent on common stock. Myers pays no taxes. Myers plans to issue $50 million of debt with a return of 4.9 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. 70 Correct response: 70million Given that the firm will still have a value of $70 million, what will be the value of the equity after the debt issue? Please state your answer in millions. Enter your response below. 20 Correct response: 20million
Given that the value of the equity after the debt issue will be $20, what will be the expected return on the stock after the debt issue? Enter your answer as a percentage and round to 2 decimal places. Do not enter the percentage symbol. Enter your response below. Number
