Shari's Sneakers has $100,000 of perpetual debt which trades at par and has a coupon...
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Shari's Sneakers has $100,000 of perpetual debt which trades at par and has a coupon rate of 6%. The firm has 4,000 shares of stock each priced at $25. The firm has decided that it will issue equity and repurchase $19,000 of debt. The firm faces a 25% tax rate. Assume that the firm's announcement about issuing equity to repurchase debt is both credible and a surprise to the market. After the equity issuance, how many shares of stock will Shari's Sneakers have outstanding (please answer to the nearest share. If your answer is 3,456.78 shares please enter 3457)
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