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Minimizing the amount of debt in the firm's capital structure so that the firm can borrow money at a reasonable rate when good investment opportunities

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Minimizing the amount of debt in the firm's capital structure so that the firm can borrow money at a reasonable rate when good investment opportunities arise Funneling excess cash fows bock to shareholders through steck repurchases Increasing the amount of debt in the firm's target capital structure in the hope that higher debt-service requirements will force manbgers to be more disciplined Funneling excess cash fows back to shareholders through Kigher dividends Green Goose Automation Company currently has no debt in its capital structure, but it is considering using some debt and reducing its outstarding equ ty. The firms unlevered beta is 1.25 , and its cost of equity is 11.75\%, Because the firm has no debt in its capital structure, its weighted average cott of capial (WACC) also equals 11.75%. The risk.free rate of interett (ras) is 3\%, and the market risk premium (RPM) is 7%. Green Geose's marginal tax rate is 25%. Green Goose is examining how different levels of debt will affect its costs of debt and equity, as wes as its WACC. The firm has cellected the financial information that follews to analyre its weighted average cost of capital (WNCC), Cemplete the following table. Green Goose Astomation Company currently has no debt in its capital structure, but is is considering using some debt and reducing is outstanding equity. The firm's unievered beta is 1.25, and its cost of equity is 11.75\%. Because the Frm has no debt in its capital structure, its weighted average cost of captal (WACC) aiso equals 11.75\%. The rikiffee rate of interest (f:F) is 3\%, and the market risk premium (RPM) is 7\%, Green Gobse's marginal tox rate is 25%. Green Goost is examining how different leveis of debt will affect its costs of debt and equity, as wel as as wACC. The firm has collected the firancial Information that follows to analyze its welghted ayerage cost of capital (WACC). Complete the following table

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