Topsy Breweries Inc, a UK brewer headquartered in Turvey, is all equity financed and generates perpetual annual EBIT of $800. Assume that the EBIT, and all other cash flows, occur at year end and that we are currently at the beginning of a year
Topsy has 2,000 shares outstanding which trade for $4.00. The stockholders of Topsy require a return of 7%. Topsy is considering an open market stock repurchase. It plans to buy 15% of its outstanding shares at a price of $4.188. The repurchased shares will be cancelled. It will finance the repurchase by issuing perpetual bonds with a coupon rate (and yield) of 4%. Assume that the tax rate is 30%. What is the price of Topsy shares after the repurchase (PA)?
A) PA = $4.00
B) PA = $4.05
C) PA = $4.09
D) PA = $4.14
E) PA = $4.19
E
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Annual demand for color ink jet printers for a computer retailer is 500 units; order placement costs are $35; each printer averages $200 at cost; and annual carrying costs per unit are $50 . The economic order quantity is 27 units
Indicate whether the statement is true or false
Seth Goldman's company HonestTea is committed to
A) gathering customer feedback and sales data B) fair trade C) producing organic, low-calorie beverages D) all of the above