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Business, 02.12.2020 17:00 leo4687

Executive Chalk is financed solely by common stock and has 25 million shares outstanding with a market price of $10 a share. It announces that it intends to issue $160 million of debt and use the proceeds to buy back common stock. Assume that the MM assumptions hold (i. e., no taxes, no costs of financial distress). a) What is the value of the firm before and after the proposed capital structure change

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