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Author Question: Vafeas Inc.s capital structure consists of 75% debt and 25% common equity, it has a beta of 1.5, and ... (Read 70 times)

903f23fj0

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on: Aug 7, 2023
Vafeas Inc.’s capital structure consists of 75% debt and 25% common equity, it has a beta of 1.5, and its tax rate is 40%. However, the CFO thinks the company has too much debt, and he is considering moving to a capital structure with 45% debt and 55% equity. The risk-free rate is 6% and the market risk premium is 7%. By how much would the firm’s cost of equity change as a result of altering its capital structure?

◦

–3.20%


◦

–3.78%


◦

–4.36%


◦

4.91%

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by 903f23fj0 on Aug 7, 2023

spicyzack

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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903f23fj0

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Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review

AmberC1996

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Reply 3 on: Yesterday
Excellent

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