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Best Bagels, Inc. (BB) currently has zero debt, an unleveraged firm. The firm has a total market value of $461,600. Management is considering recapitalizing by issuing enough debt so that the firm has a capital structure consisting of 30% debt and 70% equity, based on a market value at a before tax cost of 7%. Best Bagels will use the proceeds to repurchase stock at the new equilibrium market price. Its earnings before interest and taxes (EBIT) are $100,000, and it is a zero growth company. Its tax rate is 40%. The firm has 20,000 shares of common stock outstanding selling at a price per share of $23.08
Based on the new corporate value of BB found in problem 39, what is the new stock price and how many shares remain outstanding after the recapitalization?
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