Question: answer in excel please 6. Macbeth Spot Removers is entirely equity financed. Use the following information. Data Number of shares Price per share Market value

 answer in excel please 6. Macbeth Spot Removers is entirely equity

answer in excel please

6. Macbeth Spot Removers is entirely equity financed. Use the following information. Data Number of shares Price per share Market value of shares Expected operating income 2,200 34 74,800 11,220 Return on assets 15% Macbeth now decides to issue $37,400 of debt and to use the proceeds to repurchase stock. Suppose that Ms. Macbeth's investment bankers have informed her that since the new issue of debt is risky, debtholders will demand a return of 11.3%, which is 2.7% above the risk-free interest rate. Assume corporate tax rate is zero. A. What are the company's overall cost of capital after the debt issue? B. What is the cost of equity after the debt issue? C. Suppose that the beta of the unlevered stock was 0.60. What will BA, BE, and BD be after the change to the capital structure? 6. Macbeth Spot Removers is entirely equity financed. Use the following information. Data Number of shares Price per share Market value of shares Expected operating income 2,200 34 74,800 11,220 Return on assets 15% Macbeth now decides to issue $37,400 of debt and to use the proceeds to repurchase stock. Suppose that Ms. Macbeth's investment bankers have informed her that since the new issue of debt is risky, debtholders will demand a return of 11.3%, which is 2.7% above the risk-free interest rate. Assume corporate tax rate is zero. A. What are the company's overall cost of capital after the debt issue? B. What is the cost of equity after the debt issue? C. Suppose that the beta of the unlevered stock was 0.60. What will BA, BE, and BD be after the change to the capital structure

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