how to calculate share price! Yasmin Corporation is comparing two different capi
ID: 2634244 • Letter: H
Question
how to calculate share price!
Yasmin Corporation is comparing two different capital structures an all-equity plan (Plan I) and a levered plan (Plan II) Under Plan I, Yasmin would have 185,000 shares of stock outstanding Under Plan II, there would be 135,000 shares of stock outstanding and $1 92 million in debt outstanding. The interest rate on the debt is 7 percent and there are no taxes. Use MM Proposition I to find the price per share (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g.. 32.16).) Share price $ per share What is the value of the firm under each of the two proposed plans? (Do not round intermediate calculations. Enter your answers in dollars, riot millions of dollars (e.g., 1,234.567).) All equity plan $ Levered plan $Explanation / Answer
no. of shares repurchased 50000 =185000-135000 amount of debt used to repurchase the shares 1920000 price per share 38.4 =1920000/50000 value of firm all equity plan 7104000 =185000*38.4 levered plan 7104000 =135000*38.4+1920000
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