Solution-Achieve the target debt ratio

Achieve the target debt ratio

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Hutchinson Corporation has zero debt - it is financed only with common equity. Its total assets are $490,000. The new CFO wants to employ enough debt to bring the debt/assets ratio to 40%, using the proceeds from the borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio?

Reference no: EM132439122

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Achieve the target debt ratio

Reference no: EM132439122

Reference no: EM132439122

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