Copper World is an all-equity firm operating in a perfect capital market with 10 million...
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Finance
Copper World is an all-equity firm operating in a perfect capital market with 10 million shares outstanding at a current price of $20 per share. Copper plans to increase leverage by borrowing $40 million and using the funds to repurchase shares.
What is the value of the equity after repurchasing the shares, and
How many shares will the company have outstanding after the repurchase?
a.
$60 million / 6 million shares outstanding
b.
$60 million / 4 million shares outstanding
c.
$160 million / 8 million shares outstanding
d.
$200 million / 6 million shares outstanding
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