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Compute bki weighted average cost of capital

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Suppose that Mr. Dubinski has obtained from Blaine's banker the quotes below for default spreads over 10-year Treasury bonds [note that these differ from the more general corporate bond yields in case Exhibit 4.] What do these quotes imply about BKI's cost of debt at the various debt levels and credit ratings? Compute BKI's weighted average cost of capital at each of the indicated debt levels. What do your calculations imply about Blaine's optimal capital structure? Based on these calculations, how many shares should Blaine purchase and at what price

Reference no: EM133112080

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