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
why do investors pay attention to bond ratings?

a) Explain what you understand by ‘Branding'? b) A ‘Corporate identity' is often viewed as being composed of three parts; state them giving two examples of each. c) ‘Corpo

considering floatation on the stock exchange, produce a report explaining advantage of such a move


What is the basic goal of a business? The main financial goal of the business firm is to make the most of the wealth of the firm's owners.  Wealth, in turn refers to value good

differentiate between pricing efficiency and allocative efficiency

Suppose that Oxford Inc. is interested in the two new products, AME and CGK. Because of its capital budget constraint, it can only launch one new product line. Eric just graduated

How has the merger activity in the past decade affected the concentration of assets in the banking industry? A: Over the last decade, the number of commercial banks declined

a) Cookie Monster Inc. (a $15 billion snack food company) is considering acquiring Keebler Elves but is unsure of how much is should be willing to pay for the target firm. At the

Question: (a) With the help of illustrative and numerical examples differentiate fully speculation and arbitraging in the context of foreign exchange. (b) Shirley, a trade