SSI is for sale for the price shown below (for 100% of the firm's stock). You...

   

 

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SSI is for sale for the price shown below (for 100% of the firm's stock). You would like to buy the firm. As part of the purchase transaction, you will optimize SSI's capital structure for all stakeholders. IE: you will use some of your cash to fund the purchase of all its stock, and have the firm take out a loan on the purchase date to fund any remaining amount. Purchase price of firm's equity (100% of the firm's stock): $200.00 MM Based on your above analysis, what is the D/(D+E) ratio that you will set for the firm? How much of your cash will you use to fund the purchase? (You are just buying stock, not working with a team to also provide a loan to the company). Report your answer to one decimal place. SSI is for sale for the price shown below (for 100% of the firm's stock). You would like to buy the firm. As part of the purchase transaction, you will optimize SSI's capital structure for all stakeholders. IE: you will use some of your cash to fund the purchase of all its stock, and have the firm take out a loan on the purchase date to fund any remaining amount. Purchase price of firm's equity (100% of the firm's stock): $200.00 MM Based on your above analysis, what is the D/(D+E) ratio that you will set for the firm? How much of your cash will you use to fund the purchase? (You are just buying stock, not working with a team to also provide a loan to the company). Report your answer to one decimal place.

Answer rating: 100% (QA)

Since you are using all of your cash to buy the equity of the firm the debttoequity DE ratio ... View the full answer