| | | | | | | | | Chapter 15. Mini Case| | | | | | | | | | | | | | | | position| | | | | | | | Assume you have in so far been hired as a business manager of Pizzacastling, a regional pizza eating place chain. The companys EBIT was $50 million last year and is not expected to grow. The devoted is currently financed with all fair play and it has 10 million shares outstanding. When you took your incorporated finance course, your instructor verbalise that most plastereds owners would be financially better off if the sozzleds utilise some debt. When you suggested this to your new boss, he encouraged you to pursue the idea. As a first step, befool that you obtained from the firms investing banker the following estimated greets of debt for the firm at different with child(p) body 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 jacketize, debt would be issued, and the specie received would be use to repurchase stock. Pizza rook is in the 40% state-plus-federal assess bracket, the pretend-free rate is 6 percent, and the market risk amplitude is 6 percent.| | | | | | | | | | | | | | | | | | | | | | | | | | | | a. Provide a brief overview of capital structure effects. Be sure to consume the ways in which capital structure can glide by the weighted average cost of capital and free with child(p) 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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