Describe what can do to undo the effect of the decision

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Schwartz Industry is an industrial company with 103.9 million shares outstanding and a market capitalizatio (equity value) of $3.36 billion. It has $2.27 billion of debt outstanding. Management have decided to delever the firm by issuing new equity to repay all outstanding debt.

Problem a. How many new shares must the firm issue?

Problem b. Suppose you are a shareholder holding 100 shares, and you disagree with this decision. Assuming a perfect capital market, describe what you can do to undo the effect of this decision.

Reference no: EM132776248

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