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What do you think about the current structure of capital of this company? Is this company creating value? Suppose you are a senior portfolio manager

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What do you think about the current structure of capital of this company? Is this company creating value?

Suppose you are a senior portfolio manager of an international investment bank that oversees a USA investment portfolio with total assets of 25 billion. For company B\&G Ltd., you know the following information: EBT=680,000 Interest rate =8% (before tax) Expected market return (Rm)=9% Total debt =1 million Tax rate =40% of B&G=1.5 Total equity =3 million Risk free rate (Rf)=6%

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