Question: Consider a firm whose capital structure includes 40% debt worth 60 million dollars and 60% equity worth 90 million dollars. Suppose that the firm could

Consider a firm whose capital structure includes 40% debt worth 60 million dollars and 60% equity worth 90 million dollars. Suppose that the firm could effect a change in the capital structure (leaving the firm's assets unchanged), such that the new structure was 60% debt worth 99 million dollars and 40% equity worth 66 million dollars. What would the value of the company be after the change? Has the risk of the firm changed? Would the stockholders favor such a change (why or why not?)
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