Before the buy-back the number of outstanding shares

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Jam llc unexpectedly executed a share buy-back. Before the buy-back the number of outstanding shares was 11,123,000, the market price of one share was $2.04 and the return on levered equity was 12.00%. The return on levered equity after the buy-back is 14.12%. The debt amount was $18,500,000. Also, the company has kept a constant debt level before and after the buy-back. The corporate tax rate is 35% the cost of debt is 2.45% and the return on unlevered equity is not aected by the buy-back.

How many shares were bought back? The answer is  4,344,316 (I posted this answer 2 timee and the answer given was incorrect. Please do not reply until the answer  4,344,316 is reached)

Reference no: EM131185126

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