Question: Homemade capital structure occurs when: O Shareholders borrow or lend to recreate the cash flows that would occur if the firm had changed its capital



Homemade capital structure occurs when: O Shareholders borrow or lend to recreate the cash flows that would occur if the firm had changed its capital structure. Shareholders sell shares every 3 months to create a pseudo "dividend stream. Shareholders sell all of their shares to avoid the risk of stock loses. Shareholders double their shareholdings to double their gains in up markets and double their loses in down markets. Jupiter's 79 Moons, Inc. issued a 10-year annual bond at 7 percent note 5 years ago, hence, the now note is due in just 5 years. The $1,000 face value bond currently sells for $1,045. The company's tax rate is 21 percent. What is Jupiter's 79 Moon's after-tax cost of debt? 5.671% 2.086% 4.688% 4.160%
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