Question
JMC Corp. also wants to double its sales to 1,000,000 bottes next year. Towards that it plans to restructure its capital. It currently is financed
JMC Corp. also wants to double its sales to 1,000,000 bottes next year. Towards that it plans to restructure its capital. It currently is financed entirely by equity of $200,000. It plans to reduce its equity 50% and borrow long-term debt of $200,000 @ 5% interest cost.
Required:
1) Calculate the new Degree of Financial Leverage (DFL)
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Corporate Financial Management
Authors: Glen Arnold
5th edition
978-1292178066, 129217806X, 273758837, 978-0273758839
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