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Please help with part 5 of this question: All the other parts have been answered here: https://www.chegg.com/homework-help/questions-and-answers/bnp-inc-equity-firm-12-000-shares-outstanding-current-stock-price-40-per-share-company-pla-q53265905 BNP Inc. is an all-equity firm with 12,000
Please help with part 5 of this question: All the other parts have been answered here:
https://www.chegg.com/homework-help/questions-and-answers/bnp-inc-equity-firm-12-000-shares-outstanding-current-stock-price-40-per-share-company-pla-q53265905
BNP Inc. is an all-equity firm with 12,000 shares outstanding. The current stock price is $40 per share. The company is planning to issue a perpetual debt to buy back its stocks. It can either borrow $120,000 at 4% or $180,000 at 6%. The current EBIT is $120,000 and the tax rate is 30%. [Keep at least 2 decimal places for dollar amounts and 4 decimal places for rates] 1. Calculate the current cost of capital. 2. Calculate the debt equity ratios after the two recapitalization plans. 3. Calculate the cost of equity after the two recapitalization plans. 4. Calculate the stock prices after the two recapitalization plans. 5. Calculate the breakeven EBIT between the two proposed recapitalization plans
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