Find the net change in the value of the company due to the


XYZ Corp has just sold $50 million of bonds at a coupon of 9% and has used the proceeds to buy back its own stock at $35 a share. The tax rate of Auburn is 40%. Because of higher leverage the bankruptcy costs have increased by $20 million. Find the net change in the value of the company due to the financial restructuring.

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Financial Management: Find the net change in the value of the company due to the
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