Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. zetatron is an all-equity firm with 70 million sha

Zetatron is an all-equity firm with 70 million shares outstanding, which are currently trading for...

60.1K

Verified Solution

Question

Finance

Zetatron is an all-equity firm with 70 million shares outstanding, which are currently trading for $5.02 per share. A month ago, Zetatron announced it will change its capital structure by borrowing $43 million in short-term debt, borrowing $63 million in long-term debt, and issuing $57 million of preferred stock. The $163 million raised by these issues, plus another $90 million in cash that Zetatron already has, will be used to repurchase existing shares of stock. The transaction is scheduled to occur today. Assume perfect capital markets.

a. What is the market value balance sheet for Zetatron

i. Before this transaction?

ii. After the new securities are issued but before the share repurchase?

iii. After the share repurchase?

b. At the conclusion of this transaction, how many shares outstanding will Zetatron have, and what will the value of those shares be?

PLEASE SHOW WORK

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

Use the data below from an electron impact mass spectrum of a pure compound to deduce...

Medical Sciences
1.2K views

How homeostatic imbalance results in ALS symptoms?

Physics
1.2K views

For the following scenario draw both system diagrams and energy pie charts A moving cart...

Geometry
1.2K views

Nicole has a rectangular poster. The poster is 1.6 meters long and 1.2 meters wide....

Geometry
1.2K views

A cone is cut by a plane that is perpendicular to its base Which of...

Basic Math
1.2K views

Lizbeth has two choices for her retirement account. She starts with $12,000. Choice A account...

Accounting
1.2K views

1. You are given the following information about the...

Accounting
1.2K views

(ii) Unrelated to the question above, compute the Fixed...

Accounting
1.2K views

Solve. Ralph Corporation reported the following revenue data: (Click the icon to view...

Accounting
1.2K views

a. Perform a horizontal analysis, showing the percentage change in each income statement component between...

Accounting
1.2K views

ABCS company had $100,000 in net sales, $45,000 in cost of merchandise sold, $60,000 in...

Accounting
1.2K views

Please answer all parts, will thumbs up. ...