medium · Investment Banking implied-share-price
Company B has $500 million in total debt and $100 million in cash. It issues $200 million in new debt to fund a200 million share buyback.
What is the impact on the company's Enterprise Value (EV) and its Net Debt?
- EV remains unchanged; Net Debt increases by $200 million.
- Both EV and Net Debt remain unchanged.
- EV decreases by $200 million; Net Debt increases by $200 million.
- EV increases by $200 million; Net Debt remains unchanged.
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