Question

Dye Trucking raised $85 million in new debt and used this to buy back stock. After the recap, Dye's stock price is $8.50. If Dye had 70 million shares of stock before the recap, how many shares does it have after the recap

Answer 1

60,000,000

Step-by-step explanation:

Dye trucking raised $85 million to buy stock

After the recap Dye's stock price is $8.50

Dye share had 70 million share before the recap

Therefore the number of shares present after the recap can be calculated as follows

= 70,000,000-(85,000,000/8.50)

= 70,000,000-10,000,000

= 60,000,000

Hence the number of shares after the recap is 60,000,000