Miller Inc. Corp. is considering issuing $500 million of additional debt
Question # 00345712
Posted By:
Updated on: 07/26/2016 01:06 AM Due on: 07/26/2016
Miller Inc. Corp. is considering issuing $500 million of additional debt and using the proceeds to buy back some outstanding shares.
Miller Inc. shares are currently trading at $45 per share and there are 30 million shares outstanding.
Miller Inc. also has $850 million of debt outstanding which is trading at par at a yield of 9.5%.
Analysts are forecasting that Miller Inc. shares will pay a dividend of $1.20 in one year and that the dividend will grow at 10% per year for the foreseeable future.
Miller Inc. has a corp. tax rate of 46%
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Rating:
/5
Solution: Miller Inc. Corp. is considering issuing $500 million of additional debt