Firm debt-equity ratio in the absence of corporate taxes

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Reference no: EM132052900

1. Explain why the weighted average cost of capital is invariant to the firm’s debt-equity ratio in the absence of corporate taxes.

2. Please write a detailed paragraph about the Company business background for Apple company :), I appreciate your time thank you!

3. ABC Corp will have earnings per share of $60 this year and expect that they will pay out $20 of these earnings to shareholders in the form of a dividend. ABC’s stock is currently trading for $171.43 and their equity cost of capital is 25%. What return must the company be earning on its new investments?

Reference no: EM132052900

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