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Find the price per share of pony corp

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Reference no: EM132826179

Assume capital markets are perfect.

Mustang Corp and Pony Corp are two companies that generate identical generate identical cash flows and with similar risk. Imagine that Mustang is all-equity, with 4 million shares outstanding that trade for a price of $29 per share. Pony Corp has 2 million shares outstanding and $9 million in debt at an interest rate of 5%.

Find the price per share of Pony Corp.

Reference no: EM132826179

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