An all equity financed company is contemplating the use of debt. Under the following scenario, A. how
Question:
An all equity financed company is contemplating the use of debt. Under the following scenario,
A. how much debt financing should be used, and if so why?
Debt/asset ratio(%) Cost of equity (%) Common stock share price ($) EPS
0 5 20 _____
10 6 22 _____
30 8 23 _____
50 10 21 _____
- 14 20 _____
Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso