Question
F.E 15. If an all equity firm with $666,979 equity wants to issue debt and raise the debt ratio to 0.44 without any change in
F.E
15. If an all equity firm with $666,979 equity wants to issue debt and raise the debt ratio to 0.44 without any change in total assets, by retiring some of the equity with the proceeds of the debt issue, how much to they need to borrow? Hint: Ask yourself what the total assets are of this all-equity firm before they issue any debt.? Answer to the nearest dollar, omitting the dollar sign.
16. If you deposit $10,610 dollars into a savings account, what interest would you need to be earning to have $16,629 dollars in the same account 4 years later? Answer as a percent and to the nearest hundredth of a percent as in xx.xx % and enter without the percent sign. Hint: You can set this up as an IRR problem in Excel but since there are only two cash flows you can also use algebra to solve for the interest rate directly.
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