Question
A firm is currently all equity financed, but is considering changing its capital structure to 30% debt and 70% equity. The break-even EBIT is $500,000.
A firm is currently all equity financed, but is considering changing its capital structure to 30% debt and 70% equity. The break-even EBIT is $500,000. If the firm forecasts EBIT to be $300,000, then it should change it's capital structure to more debt and less equity.
Question 7 options:
| True | |
| False |
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International Financial Management
Authors: Jeff Madura
2nd Edition
0314430296, 978-0314430298
