Consider the WACC for a firm that pays taxes. Explain what a firms best course of action

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Consider the WACC for a firm that pays taxes. Explain what a firm’s best course of action would be to minimize its WACC and thereby maximize the firm value. Use the WACC formula for your explanation.

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Fundamentals of corporate finance

ISBN: 978-0470876442

2nd Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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Question Posted: Jun 12, 2012 01:16 AM

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Consider the WACC for a firm that pays taxes. Explain what a firms best course of action

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WACC 1 T c k Debt DV k cs EV Since we know that k cs k Debt then it would make sense to incr...View the full answer

Fundamentals of corporate finance

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