Question
Beranek Corp has $1,020,000 of assets, and it uses no debt--t is financed only with common equity. The new CFO wants to employ enough debt
Beranek Corp has $1,020,000 of assets, and it uses no debt--t is financed only with common equity. The new CFO wants to employ enough debt to raise the debt ratio to 40%, using the proceeds from borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio?
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Foundations Of Financial Management
Authors: Stanley B. Block, Geoffrey A. Hirt, Bartley R. Danielsen
13th Edition
0073382388, 978-0073382388
