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Now that your firm has? matured, you are considering adding debt to your capital structure for the first time. Your? all-equity firm has a market value of ?$20 million and you are considering issuing ?$2.0 million in debt with an interest rate of 7?% and using it to repurchase shares. You pay a corporate tax rate of 25?%. Assume taxes are the only imperfection and the debt is expected to be permanent.
a. What will be the total value of the firm after the change in capital? structure?
b. What will be the value of the remaining equity after the change in capital? structure?
a. The total value of the firm after the change in capital structure is ?$enter your response here million. ?(Round to two decimal? places.)
b. The value of the remaining equity after the change in capital structure is ?$enter your response here million. ?(Round to two decimal? places.)
The retailer faces demand of D units per year and every order that is placed incurs an order processing fee of K dollars and a unit purchase cost of c dollars.
Question: What is the relationship between critical success factors (CSFs) and metrics?
Bonds issued by Fairfax Paint have a par value of 1000 dollars, were priced at 865.35 dollars six months ago, and are priced at 795.11 today.
what will be your respect development
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Assume that WhirledCom has an issue of 15-year $1000 par value bonds that pay 6% interest, semi annually. Further assume that today's required rate of return on these bonds is 9%. How much would these bonds sell for today ?
A. Explain the advantages and disadvantages of the use of debt to a company.
Assume that you have invested half of your wealth in a risk-free asset and half in a risky portfolio P. Is it theoretically possible to lower your portfolio
A static budget enables a company to examine projected income over a range of sales levels. Foreign currency exchange rates refer to the relative values of the currencies of different countries.
Apply the kinked demand curve model presented by Paul Sweezy to illustrate and explain to Drake's management the probable consequences
the preferred stock of ciso inc. pays an annual dividend of 6.50 a share and sells for 48 a share. what is cisos cost
Consider a stock that is trading at $100 a share. The annual volatility of the stock is 20 percent, and the 3-month nominal risk-free interest rate is 8 percent
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