How many new shares must the firm? issue

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Question

Schwartz Industry is an industrial company with 111.3 million shares outstanding and a market capitalization? (equity value) of $3.69 billion. It has $1.92billion of debt outstanding. Management have decided to delever the firm by issuing new equity to repay all outstanding debt.

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

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: EM133495948

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