The Ballard Corporation is considering adding more debt to its capital structure and has asked you to

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The Ballard Corporation is considering adding more debt to its capital structure and has asked you to provide it with some guidance. After looking at future levels of Ballard's EBIT, you feel very confident that in the future it will consistently be above the EBIT-EPS indifference point calculated using Ballard's current capital structure and its proposed capital structure. Based on this analysis, do you think you would be more inclined to recommend that the company keep its current capital structure or go with the proposed capital structure that will add more debt? Discuss the reasons underlying your recommendation.
Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Financial Management Principles and Applications

ISBN: 978-0134417219

13th edition

Authors: Sheridan Titman, Arthur J. Keown, John H. Martin

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