Galt Industries has 50 million shares outstanding and a market capitalization of 1.25 billion dollars....
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Finance
Galt Industries has 50 million shares outstanding and a market capitalization of 1.25 billion dollars. It also has 750 million dollars in debt outstanding. Galt Industries has decided to delever the firm by issuing new equity and completely repaying all the outstanding debt. Assume perfect capital markets.
- What is the number of shares that Galt must issue?
- Suppose you are a shareholder in Galt industries holding 100 shares, and you disagree with the decision to delever the firm. How can you undo the effect of this decision? Explain and show calculations.
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