Question: =+d. (1) Assuming that the specific financing costs do not change, what effect would a shift to a more highly leveraged capital structure consisting of
=+d. (1) Assuming that the specific financing costs do not change, what effect would a shift to a more highly leveraged capital structure consisting of 50% longterm debt, 10% preferred stock, and 40% common stock have on your previous findings? (Note: Rework parts b and c using these capital structure weights.)
(2) Which capital structure—the original one or this one—seems better? Why?
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