Assume market values are equal to book values

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The firm’s book value of equity is $20 million , assume market values are equal to book values. The firm’s debt ratio is 0.2 How many dollars of bonds does the firm need to sell to change the debt ratio to 0.45 (assume the proceeds of bond sale are used to repurchase stock)? Note: total assets do not change.

Reference no: EM131178375

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