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Following three problems Current Total assets $ 3 , 0 0 0 , 0 0 0 , 0 0 0 Tax rate 2 5 %
Following three problems
Current Total assets $ Tax rate
Operating income EBIT $ Debt ratio
Interest expense $ WACC
Net income $ MB ratio times
Share price $ EPS $
Estimated growth rate
Dividend payout ratio
After going through extensive analysis, the company has decided to target debt and equity based on market values. This strategy is expected to increase the cost of equity to assuming the pretax cost of debt
Do you agree with this target capital structure strategy as a more optimal capital structure?
Group of answer choices
Yes, the target strategy is more optimal.
No the target strategy is more optimal.
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