​Rally, Inc., is an​ all-equity firm with assets worth $ 24billion and 6 billion shares outstanding. Rally plans to borrow $10 billion and use funds to repurchase shares.​ Rally's corporatetax rate is 38 %​, and Rally plans to keep its outstanding debtequal to $ 10 billion permanently.
a. Without the increase in​ leverage, what would be​ Rally'sshare​ price?
Without the increase in​ leverage, Rally's share price is ​$nothing. ​ (Round to the nearest​ cent.)
b. Suppose Rally offers $ 4.49 per share to repurchase itsshares. Would shareholders sell for this​ price?
▼ Yes/No . ​(Select from the​ drop-down menu.) The minimum shareprice they would sell for is ​$ nothing. ​ (Round to the nearest​cent.)
c. Suppose Rally offers $ 4.79 per​ share, and shareholderstender their shares at this price. What will be​ Rally's shareprice after the​ repurchase?
If Rally offers $ 4.79 per​ share, and shareholders tender theirshares at this​ price, the share price after the repurchase will be​$ nothing. ​(Round to the nearest​ cent.)
d. What is the lowest price Rally can offer and haveshareholders tender their​ shares? What will be its stock priceafter the share repurchase in that​ case?
The lowest offer per share is ​$ nothing. ​ (Round to thenearest​ cent.) The stock price after repurchase is ​$ nothing. ​(Round to the nearest​ cent.)
