Question
a)Now think about how this estimate should change if Compass uses less debt: i)Compass's financing mix is currently 57% equity and 43% debt ( based
a)Now think about how this estimate should change if Compass uses less debt:
i)Compass's financing mix is currently 57% equity and 43% debt (based on market values); what would its Cost of Equity be if it used 100% equity financing?
ii)What would its Cost of Equity be if it shifted to 65% equity financing and 35% debt?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
