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beat Corp is in the 40% tax bracket and has a capital structure that is composed entirely of equity They are considering attering its capital

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beat Corp is in the 40% tax bracket and has a capital structure that is composed entirely of equity They are considering attering its capital structure to take advintage of prevaling tetest rates. After consulting with soveral investment bankers, thoy obtain a betore-tax cost of debl estimate of Bses if they recapitalize to 40% debt and 60% equity. The firm will use the focoeds from the debt issuance to repurchase shares of common stock ivestrnents nof peoforrod stock outstanding How mach is avallable for distribution to Stecar's shareholders atier the recapitatization (ie afloc the proceeds from the debt issue have been used to repurchase cammon stock)

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