Durant Industries has 30 million shares outstanding with a market price of $20 per share...
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Durant Industries has 30 million shares outstanding with a market price of $20 per share and no debt. Durant has had consistently stable earnings, and pays a 21% tax rate. Management plans to borrow $200 million on a permanent basis through a leveraged recapitalization in which they would use the borrowed funds to repurchase outstanding shares. The value of Durant's unlevered equity is
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