. (Market versus book value weights)Miami Distribution has 1,000 outstanding bonds that have a book value of $1,000 per bond and a market value of $1,200 per bond. Miami Distribution has 250,000 outstanding shares with a per-share book value of $40 and market value of $68.
When estimating theWACC, what proportions of debt and equity capital should be used?
The third owner is in favor of a share repurchase. HE Argues that a repurchase will increase the company's P/E ratio, return on assets, and return on equity. Are his arguments correct? How will a share repurchase affect the value of the company?
1 answer
1 answer