| | | | | | | | | Chapter 15. Mini Case| | | | | | | | | | | | | | | | bunk| | | | | | | | Assume you have further been hired as a business manager of Pizzacastling, a regional pizza eating place chain. The companys EBIT was $50 million last social class and is not expected to grow. The unwavering is currently financed with all faithfulness and it has 10 million shares outstanding. When you took your social systemd finance course, your instructor say that most plastereds owners would be financially better off if the satisfyings employ some debt. When you suggested this to your new boss, he encouraged you to pursue the idea. As a first step, tangle with that you obtained from the firms enthronisation banker the following estimated termss of debt for the firm at different bang-up structures:| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Percent Financed| | | | | | | with debt, wd| rd| | | | | | | 0%| | 0.0%| | | | | | | 20%| | 8.0%| | | | | | | 30%| | 8.5%| | | | | | | 40%| | 10.0%| | | | | | | 50%| | 12.
0%| | | | | | | | | | | | | | | If the company were to re pileusize, debt would be issued, and the money received would be apply to repurchase stock. Pizza castling is in the 40% state-plus-federal levy bracket, the encounter-free rate is 6 percent, and the market risk bounty is 6 percent.| | | | | | | | | | | | | | | | | | | | | | | | | | | | a. Provide a brief overview of capital structure effects. Be sure to look at the ways in which capital structure can propel the weighted average cost of capital and free demanding cash flows. | | | | | | | | | | | | | | | | | | | | | | | | | | | | b. (1.) What is business risk? What factors...If you want to get a just essay, order it on our website:
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