What would be the total value of the companys securities


Problem

A company is all-equity financed and its stock is worth $4,600,000. There are no taxes. Management is considering issuing $1,000,000 worth of debt and using the proceeds to repurchase shares. What would be the total value of the company's securities if the change in capital structure is done?

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Finance Basics: What would be the total value of the companys securities
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