Question

This statement pertains to the following 3 questions

Nordion is currently an all-equity firm with 20 million shares outstanding and a stock price of $6.5 per share. Although outside investors (i.e., the market) currently expect Nordion to remain an all-equity firm, Nordion plans to announce that it will borrow $60 million and use the funds to repurchase equity. Nordion will keep this level of debt constant. The only market imperfection is corporate taxes, with a tax rate of 35%.

The market value of Nordion's existing assets right after the debt is issued, but before the equity repurchase is:

Question 9 options:

	$171 M
	$151 M
	$211 M
	$191 M

Question 10 (1 point)

The market value of Nordion's existing assets before the announcement is:

Question 10 options:

	$151 M
	$130 M
	$190 M
	$161 M

The number of shares Nordion will repurchase as part of this transaction is closest to:

Question 11 options:

	7.95 M
	7.55 M
	9.10 M
	8.20 M

Answer 1

­SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

ANSWERS : $151 M, $130 M, 7.95M