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Question 1 6/6 pts VanMannen Foundations, Inc. is considering using some debt, moving to the market value captal structure indicated below. The money raised would
Question 1 6/6 pts VanMannen Foundations, Inc. is considering using some debt, moving to the market value captal structure indicated below. The money raised would be used to repurchase stock it is estimated that the increase in risk resulting from the additional leverage would cause the required rate of return on culty to rise somewhere indicated below. If this plan were carried out what would be VF WACC? (Sute your answers in percentages, in four decimals EBIT $80,000 Tax rate 25% New Interest rate == 6.00% Now cost of equity, 10.75% New DebtValue = wy 20% Now Equity/Value=w, 80% 0.095 9.5 with margin: 0
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