Question: 1 - Big it Corp. is debating whether to convert its all - equity capital structure to one that is 3 5 % debt. Currently,
Big it Corp. is debating whether to convert its allequity capital structure to one that is debt. Currently, there are shares outstanding, and the price per share is $ expected to remain at $ per year forever. The interest rate on new debt is and there are no taxes. a Mike Tyson, a shareholder of the firm, owns shares of stock. What is his cash flow under the current capital structure? assuming the firm has a dividend payout rate of pts b What will Tyson's cash flow be under the proposed capital structure of the firm? Assume he keeps all of his shares. pts
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