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Author Question: What should the firms target capital structure be set to do? (Read 802 times)

mccallkeeler

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on: Aug 7, 2023

Question 1

What is the value of the firm according to MM with corporate taxes if the following is true?

EBIT: $200,000

rd: 14%

Tc: 35%

Debt: $600,000

rsU: 17%


◦

$965,875


◦

$974,706


◦

$987,500


◦

$996,250



Question 2

What should the firm’s target capital structure be set to do?

◦

minimize the cost of preferred stock


◦

minimize the weighted average cost of capital (WACC)


◦

minimize the cost of equity (rs)


◦

minimize the cost of debt (rd) 

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

kugyo01

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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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mccallkeeler

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

Joy Chen

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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