What is the market value of the company

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An all-equiry business has 175M shares outstanding selling for $20/share. Management believes interest rates are unreasonably low and decides to execute a leveraged recapitalization. It will raise $1B in debt and repurchase 50M shares.

Assuming the Irrelevance Proposition holds, what is the market value of the company after the recap and what is the market value of the equity?

Reference no: EM132130956

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