Currently, the firm is all equity funded with 1000000 shares
valued at $13 per share and the required return on equity is 8%.
Income tax rate is 30%. Your banker has indicated that the
following leverage restructurings are possible: Number of shares
700,000 550,000 450,000 Debt Leverage 30.00% 45.00% 55.00% Interest
7.50% 8.00% 8.50% ROE 8.50% 8.75% 9.25% Estimate which two debt
restructures maximize firm value.
Group of answer choices
30%; 45%
45%; 55%
0%; 30%
30%; 55%
0%; 55%
Currently, the firm is all equity funded with 1000000 shares valued at $13 per share and the required return on equity i
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