Iphansi Flooring has sales of R6,000,000, fixed costs of R1,900,000 and variable costs equal to 40% of sales. It has debt worth R2,500,000 at an interest rate of 12% and a target capital structure of 40% debt and 60% equity. Its tax rate is 30% and its cost of equity is 17.7%. According to the traditional approach to capital structure the value of the firm should be?

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Iphansi Flooring has sales of R6000000 fixed costs of R1900000 and variable costs ... View the full answer