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Author Question: Based on the information below, what is Ezzel Enterprises optimal capital structure? (Read 369 times)

petersan

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on: Aug 7, 2023

Question 1

Assuming the following variables, what is the value of the firm according to MM with corporate taxes?

​

EBIT: $340,000 rd: 13% Tc: 35%

Debt: $600,000 rsU: 18%


◦

$1,275,875


◦

$1,337,500


◦

$1,437,778


◦

$1,546,250



Question 2

Based on the information below, what is Ezzel Enterprises’ optimal capital structure?

◦

Debt = 30%; Equity = 70%; EPS = $3.02; Common share price = $28.50


◦

Debt = 50%; Equity = 50%; EPS = $3.24; Common share price = $30.90


◦

Debt = 85%; Equity = 15%; EPS = $3.76; Common share price = $33.60


◦

Debt = 65%; Equity = 35%; EPS = $3.51; Common share price = $35.90

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

xinyifff

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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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petersan

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Reply 2 on: Aug 7, 2023
:D TYSM

mjenn52

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Reply 3 on: Yesterday
Excellent

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