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Mini Case: Techlink Technology Inc. Corporation's Capital Structure and Investment Decision Background: Techlink Technology Inc. is a technology hardware company based in British Columbia (BC),

Mini Case: Techlink Technology Inc. Corporation's Capital Structure and Investment Decision Background: Techlink Technology Inc. is a technology hardware company based in British Columbia (BC), specializing in wireless communication technology, particularly fast fibre cable. The company is considering expanding its product line, necessitating a significant investment in research and new manufacturing facilities. The CEO and CFO must provide recommendations to the board regarding the feasibility of this investment project. Capital Structure Analysis: Techlink's capital structure currently comprises 60% equity and 40% debt. The company is contemplating increasing its debt-to-equity ratio to 65% debt and 35% equity, believing that this adjustment could reduce the overall cost of capital. Techlink has a beta of 1.2. Its 10-year bond trades at $985 w

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