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Execuvive Cheese has issued debt with a market value of $115.96 million and has outstanding 14.20 million shares with a market price of $10 a shore. It now announces that it intends to issue a further $66.24 million of debt and to use the proceeds to buy back common stock. Debtholders, seeing the extro risk, mark the value of the existing debt down to $62 million. a-1. Calculate the market price of the stock following the announcement. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a-2. How is the market price of the stock affected by the announcement? b. How many shares can the company buy back with the $66.24 milion of now debt that it issues? Note: Do not round intermediate calculations. Enter your answer in millions. Round your answer to 1 decimal place. c-1. What is the market value of the firm (equity plus debt) after the change in capltal structure? Note: Do not round Intermediate calculations. Enter your answer in millions. Round your answer to 2 decimal places. c.2. Did the market value of the firm change? d. What is the debt ratio after the change in structure? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. e. Who (if anyone) gains or loses? Execuvive Cheese has issued debt with a market value of $115.96 million and has outstanding 14.20 million shares with a market price of $10 a shore. It now announces that it intends to issue a further $66.24 million of debt and to use the proceeds to buy back common stock. Debtholders, seeing the extro risk, mark the value of the existing debt down to $62 million. a-1. Calculate the market price of the stock following the announcement. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a-2. How is the market price of the stock affected by the announcement? b. How many shares can the company buy back with the $66.24 milion of now debt that it issues? Note: Do not round intermediate calculations. Enter your answer in millions. Round your answer to 1 decimal place. c-1. What is the market value of the firm (equity plus debt) after the change in capltal structure? Note: Do not round Intermediate calculations. Enter your answer in millions. Round your answer to 2 decimal places. c.2. Did the market value of the firm change? d. What is the debt ratio after the change in structure? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. e. Who (if anyone) gains or loses

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