The Berndt-Walters company is a marketing firm that currently has no debt. The CFO and CEO are

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The Berndt-Walters company is a marketing firm that currently has no debt. The CFO and CEO are currently looking at bringing debt into the company's capital structure to a level of 30% debt/ 70% equity. The company has 6,500 shares currently traded with a market price of $45. EBIT is 29,000 and will likely stay at that level indefinitely. If the company were to borrow right now, the interest rate on new debt on new debt will be 8%. There are no taxes. One of the shareholder own 100 shares. What will their cash flow be under the current capital structure, assuming a dividend payout rate of 100%?

Posted Date: May 15, 2024 04:27 AM

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The Berndt-Walters company is a marketing firm that currently has no debt. The CFO and CEO are

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