Question
a) XYZ ltd has no debt, a market value of $200 million and a cost of equity of 12 percent. i) In Modigliani and Miller
a) XYZ ltd has no debt, a market value of $200 million and a cost of equity of 12 percent.
i) In Modigliani and Miller (MM) world with no taxes, what happened to value of XYZ as its financial leverage is increased?
ii) In an MM with no taxes, what happens to XYZ Ltd's cost of equity and WACC as its financial leverage is increased ?
iii) if there are corporate taxes, what happens to the value of XYZ ltd and its WACC as its financial leverage is increased?
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Mergers Acquisition And Other Restructuring Activities
Authors: Donald M. Depamphilis
6th Edition
123854857, 978-0123854858
