Question
An all equity financed company is contemplating the use of debt. Under the following scenario, A. how much debt financing should be used, and if
An all equity financed company is contemplating the use of debt. Under the following scenario,
A. how much debt financing should be used, and if so why?
Debt/asset ratio(%) Cost of equity (%) Common stock share price ($) EPS
0 5 20 _____
10 6 22 _____
30 8 23 _____
50 10 21 _____
- 14 20 _____
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Forecasting Principles And Practice
Authors: Rob J Hyndman, George Athanasopoulos
3rd Edition
0987507133, 978-0987507136
