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Assume that XYZ Corporation is a leveraged company with the following information: Kl = cost of equity capital for XYZ = 13 percent i =

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Assume that XYZ Corporation is a leveraged company with the following information: Kl = cost of equity capital for XYZ = 13 percent i = before-tax borrowing cost = 8 percent t = marginal corporate income tax rate = 30 percent Calculate the debt-to-total-market-value ratio that would result in XYZ having a weighted average cost of capital of 9.3 percent and 13 percent respectively What would happen to the debt/equity ratio ift were decreased? Assume that XYZ Corporation is a leveraged company with the following information: Kl = cost of equity capital for XYZ = 13 percent i = before-tax borrowing cost = 8 percent t = marginal corporate income tax rate = 30 percent Calculate the debt-to-total-market-value ratio that would result in XYZ having a weighted average cost of capital of 9.3 percent and 13 percent respectively What would happen to the debt/equity ratio ift were decreased

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