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All questions need to be answered includingvthe last one. thx!! Debt Rati Equity Ratio WACC 30% 70% 6,02 % 9.40% 9.71% 40% 60% 6.75% 9.750%
All questions need to be answered includingvthe last one. thx!!
Debt Rati Equity Ratio WACC 30% 70% 6,02 % 9.40% 9.71% 40% 60% 6.75% 9.750% 9.55% 50% 50% 7.15% 10.60% 10.02% 60% 40% 11.30 % 7.55% 10.78% 70% 30% 11.45 % 8.24% 12.80% Which capital structure shown in the preceding table is Universal Exports Inc. 's optimal capital structure? O Debt ratio 70 % ; equity ratio ODebt ratio 30% 50%; equity ratio 50 % O Debt ratio O Debt ratio 40 % ; equity ratio 60% 60%; equity ratio 40 % 30% ; equity ratio O Debt ratio 70% Consider this case: Globex Corp. currently has a capital structure consisting of 40 % debt and 60 % equity. However, Globex Corp.'s CFO has suggested that the firm increase its debt ratio to 50%. The current risk-free rate is 2.5 % , the market risk premium is 79%, and Globex Corp.'s beta is 1.25. If the firm's tax rate is 35 %, what will be the beta of an all-equity firm if its operations were exactly the same? Now consider the case of another company: U.S. Robotics Inc. has a current capital structure of 30% debt and 70% equity. Its current before-tax cost of debt is 10%, and its tax rate is 35%. It currently has a levered beta of 1.25. The risk-free rate is 2.5 % , and the risk premium on the market is 76 U.S. Robotics Inc. is considering changing its capital structure to 60%% debt and 40% equity . Increasing the firm's level of debt will cause its before-tax cost of debt to increase to 12 %. Use the Hamada equation to unlever and relever the beta for the new level of debt. What will the firm's weighted average cost of capital (WACC) be if it makes this change in its capital structure? the firm's stock price. the WACC and The optimal capital structure is the one that the firm's risk. Consequently, higher levels of debt cause the firm's cost of equity to Higher debt levels Axis Chemical Co. has found that its expected EPS is maximized at a debt ratio of 45 %. Does this mean that Axis Chemical Co.'s optimal capital structure calls for 45 % debt? O No O Yes Cn 10 ASSignment uaprtar orucure vecisSIons Step by Step Solution
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