The cost of capital as the debt ratio is changed

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Reference no: EM131590499

1. What happens to the cost of capital as the debt ratio is changed?

2. At what debt ratio is the cost of capital minimized and ?rm value maximized?

3. What will happen to a ?rm value if the ?rm moves to its optimal?

4. What will happen to the stock price if the ?rm moves to the optimal and stockholders are rational?

Reference no: EM131590499

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