A firm announces intent undertake levered recapitalization, Corporate Finance

A firm announces its intent to undertake a levered recapitalization, issuing debt to repurchase a fraction of the outstanding common stock.

Upon the announcement, its stock price declines. Describe (list) 2 reasons why you might have expected that the price would instead have risen and 2 reasonable potential explanations for the decline.  

Each explanation should be very brief, concise and to the point with complete sentences.

Posted Date: 4/5/2013 5:29:49 AM | Location : United States







Related Discussions:- A firm announces intent undertake levered recapitalization, Assignment Help, Ask Question on A firm announces intent undertake levered recapitalization, Get Answer, Expert's Help, A firm announces intent undertake levered recapitalization Discussions

Write discussion on A firm announces intent undertake levered recapitalization
Your posts are moderated
Related Questions
1. You are working as an accountant for ABC Group Ltd. Your directors have asked you to prepare the necessary consolidation journal entries for the year ended 30 June 2009 (Narrati

An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000. The investor is unsure of his investment horizon and considers 5 horizons: 5, 6

Review of Revenue This activity will require you to access at least a portion of the federal budget as well as a state, local and an agency budget. This can be done online. Howeve

Question: i) The treasurer of a corporation is trying to choose between options and forwards contracts to hedge the corporation's foreign exchange risk. Discuss the relative

You are a ceo of a sotware firm that has limited access to debt equity markets. The average return on last year projects is 28 % . and cost of capital is 12%. would npv pr Irr be

Question: (a) Is it feasible for a firm to hedge without using derivatives? (b) Distinguish between natural hedging, cross-hedging and direct hedging. (c) Mr Hedginglall

Question: (a) Describe briefly how electronic money works. (b) Give two benefits of e-money to each of the following: (i) consumers, and (ii) business. (c) Outline

I have been given 3 different types of projects. They state the IRR and how much the project will add. The question goes on to give a WACC with break points. The question wants

A owns all of the X stock with a basis of $200. A's three sons own all of the Y stock equally. X and Y each have E&P of $100, respectively. A sells one half of the X stock to Y

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique. Your company is considering the constructio