21. Changes in Capital Structure. Refer again to Challenge Problem 20. Suppose Big Oil starts from the
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21. Changes in Capital Structure. Refer again to Challenge Problem 20. Suppose Big Oil starts from the financing mix in Table 13-3, and then borrows an additional $200 million from the bank. It then pays out a special $200 million dividend, leaving its assets and operations unchanged. What happens to Big Oil's WACC, still assuming it pays no taxes? What happens to the cost of equity? (LOI)
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Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
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