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Author Question: Selected financial information for the Baltimore & Ohio Railroad Corporation (B&O) is provided in ... (Read 61 times)

Lobcity

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on: Apr 25, 2021
Selected financial information for the Baltimore & Ohio Railroad Corporation (B&O) is provided in the table below. B&O is currently all equity financed, but it is considering a leveraged capital structure, details of which are presented in the column labeled 'Proposed'. Under the proposed capital structure, B&O will use all of the new debt to repurchase (and cancel) shares. How many shares will be left outstanding after the repurchase, if B&O buys shares for $30.00 per share? 

​Capital StructureCapital Structure
​CurrentProposed
EBIT$150,000 $150,000 
Debt, D0$1,500,000 
Cost of Debt, kd​N/A3%
Shares Outstanding100,000-
Stock Price$30.00 $30.00 

◦ 50,000
◦ 100,000
◦ 75,000
◦ 25,000
◦ 33,000
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by Lobcity on Apr 25, 2021

ryansturges

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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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Lobcity

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Reply 2 on: Apr 25, 2021
Excellent

ktidd

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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