Question
COK,Inc.,a prominent consumer products firm,is debating whether or not to convert its all-equity capital structure to one that is 23% debt.Currently there are 6,739shares outstanding
COK,Inc.,a prominent consumer products firm,is debating whether or not to convert its all-equity capital structure to one that is 23% debt.Currently there are 6,739shares outstanding and the price per share is $36.07.EBIT is expected to remain at $60,344per year forever.The interest rate on new debt is 7.59%and there are no taxes.
Ms.Brown,a shareholder of the firm,owns 129 shares of stock.What is her cash flow under the current capital structure (without the debt), assuming the firm has a dividend payout rate of 100%.
NOTE:Enterthe number rounding to four DECIMALS.If your decimalanswer is0.034576,your answer must be0.0346.DO NOT USE the%sign
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