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Plymouth, Inc. - wishes to change its present capital structure (D/E ratio) from (10%/90%) to (20%/80%) - L=1.30Rf=3.0%,rM=12.00%, # of shares outstanding (n)=150 - FCF0=$300
Plymouth, Inc. - wishes to change its present capital structure (D/E ratio) from (10%/90%) to (20%/80%) - L=1.30Rf=3.0%,rM=12.00%, \# of shares outstanding (n)=150 - FCF0=$300 gt=2.0% Current rD=6.00%, Tax rate =30.0%, 1. At the new capital structure (20%/80%), what will be their total risk (1) ? U=L[1+(1T)(W0WsS)]L=U[1+(1T)(W0WS)] 2. At the new capital structure (20%/80%), what will be their required cost of stock (rs) ? rs=ri+l(rnrt) [Enter answer in decimal points, e.g. 15.75% as 0.1575
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