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Blade Ltd follows the rules of Modigliani and Miller. Blade Ltds EBIT is expected to be $148,321 and all earnings will be paid out as
Blade Ltd follows the rules of Modigliani and Miller. Blade Ltds EBIT is expected to be $148,321 and all earnings will be paid out as dividends. Blade Ltd is unlevered and has 392,592 shares outstanding. Adam buys 6 shares of Blade Ltd at $3.50 per share, yet he is unsatisfied with the expected rate of return on his investment in Blade Ltd. If he can borrow at 6% and wants to achieve a rate of return of 30%, how much money should he borrow to buy additional shares in Blade Ltd?
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