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Author Question: Reefer Trucking Inc. is expected to generate EBIT of $5 million annually in perpetuity (starting in ... (Read 44 times)

dalyningkenk

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on: Apr 25, 2021
Reefer Trucking Inc. is expected to generate EBIT of $5 million annually in perpetuity (starting in one year). Reefer is all equity financed and shareholders require a return of 11%. The corporate tax rate is 35%. Reefer is proposing to issue $5 million of perpetual bonds with an annual coupon of 6%. The company uses the $5M of debt to repurchase stock at $15.65 per share. Assume that, after borrowing the $5M, Reefer never increases or decreases its debts. What is the share price after the new debt issue?
◦ $14.77
◦ $15.07
◦ $15.65
◦ $15.82
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Marked as best answer by dalyningkenk on Apr 25, 2021

Swizqar

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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dalyningkenk

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Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)

ryansturges

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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