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hello everyone in this video we are going to give you some examples about recapitalisation let's start with the first example which is about the shares remaining after a purchase ABC company has reported 100 million dollars in depth at the end of 2018 during 2019 ABC has raised to 20 million dollars in new depth and used this to buy back stocks before recap the stock price was equal to $10 and ABC had 70 million shares outstanding the question is how many shares does it have after a cup so we need to calculate and cost we know that an post is equal to n prior - the and repurchase and prior is the number of shares before the recap as given in the exercise before recap ABC had 70 million shares so it's the 70 million shares - the and repurchased to calculate the and repurchased we will use this formula D new minus the old over P prior where the Jinyu is the new adapt raised during 2019 so it says the - 20 million dollars the D old is the old depth so it's the depth of 2018 the hundred million dollars over the P prior which is the stock price before recap which is the ten dollars as a result and past will be equal to and prior 70 million - denuded - 20 million - the old which is the 100 millions over the P prior which is the ten dollars as a result the unpassed will be equal to 58 million shares so ABC had has after the repurchase and 1758 million shares let's now move to the second example which is about this price after recap after recap alka company's value of operation is for fifteen million dollars it has raised 100 million dollars in new depth to buy back stocks if before recap Alka had 50 million shares outstanding and 20 million depth what is alko's stock price after recap so we need to calculate P cost as given in the presentation over the PowerPoint P post is the value of operations or the new value of operations - the old apt over the number of shares prior to the river chase so the new value of operation is that after the repurchase or after the recap so they have said in the exercise that after recap the value of operation is 450 Millions so for 50 Millions - the depth old which is before the recap the old depth was equal to 20 million dollars so 20 million and the amp prior is that also the number of shares before the recap which is the 50 million shares as a result the price of alka company after the repurchase is eight point six dollars per share the last example is about the value of equity after recap after recap TLC company's value of operation is two hundred two hundred million dollars it had raised sixty million dollars in new depth to buy back stocks after recap TLC is weight of depth is 30% what does TLC is value of equity after recap so we need to calculate as post we know that the formula of as post is the new value of operation the open e which is the 200 million because it is after the recapitalisation so it's the new one so 200 million and times 1 minus W D which is the weight of depth which is here 30% so as post is the 200 million times 1 minus 0.23 the exposed is 114 million dollars