Unit 3 – Investing: Making Money Work for You

Recaps & Stub Stocks In a Recapitalization a company usually buys a large portion of shares back from shareholders. An example of this is a company trading at $18 that decides to distribute $15 dollars of bonds to investors, at $18 per share we’ll assume it earns $1.50 per shares, or a P/E of 12x, taking out the 40% tax rate it is making $2.50. ................
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