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A firm with no leverage has an EBIT of $15 million, a corporate tax rate...

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A firm with no leverage has an EBIT of $15 million, a corporate tax rate of 20%, an equity value of $2 free. The funds will be used to buy back shares on the market. The new share price after the annour $3.00 $2.86 $2.14 $3.07 $3.57 $200 million and 70 million shares outstanding. The firm plans to borrow $50 million at a cost of 5% per year. You can assume that the debt will stay risk Suncement of this transaction will be

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