​,

​Inc., is an​ all-equity firm with assets worth

$ 50.00$50.00

billion and

23.80523.805

billion shares outstanding.

RallyRally

plans to borrow

$ 12.50$12.50

billion and use funds to repurchase shares.

RallyRally​'s

corporate tax rate is

21 %21%​,

and

RallyRally

plans to keep its outstanding debt equal to

$ 12.50$12.50

billion permanently.

a. Without the increase in​ leverage, what would be

RallyRally​'s

share​ price?

b. Suppose

RallyRally

offers

$ 2.06$2.06

per share to repurchase its shares. Would shareholders sell for this​ price?

c. Suppose

RallyRally

offers

$ 2.43$2.43

per​ share, and shareholders tender their shares at this price. What will be

RallyRally​'s

share price after the​ repurchase?

d. What is the lowest price

RallyRally

can offer and have shareholders tender their​ shares? What will be its stock price after the share repurchase in that​ case?

Question content area bottom

Part 1

a. Without the increase in​ leverage, what would be

RallyRally​'s

share​ price?

Without the increase in​ leverage,

RallyRally​'s

share price is

​$enter your response here.

​ (Round to the nearest​ cent.)