if a firm has a total debt ratio = .50, what is the value of the...

if a firm has a total debt ratio = .50, what is the value of the equity multiplier?

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jeff jeffy answered 2 years ago

A firm has a total debt ratio of .50. What is its (TOTAL LIABILITIES / TOTAL...

A firm has a total debt ratio of .50. What is its (TOTAL LIABILITIES / TOTAL EQUITY) ratio?

a firm has a debt-equity ratio of 1.46.What is the total debt ratio? 0.59 0.46 0.77...

a firm has a debt-equity ratio of 1.46.What is the total debt ratio? 0.59 0.46 0.77 0.68

A firm with no debt financing has a firm value of $50 million. It has a...

A firm with no debt financing has a firm value of $50 million. It has a corporate marginal tax rate of 35 percent. The firm’s investors are estimated to have marginal tax rates of 22 percent on interest income and a weighted average of 17 percent on stock income. The firm is planning to change its capital structure by issuing $10 million in debt, and repurchasing $10 million of common stock. Based on the information above, answer next 2 questions....

A firm has debt-equity ratio of 1 (i.e. the value of the debt divided by the...

A firm has debt-equity ratio of 1 (i.e. the value of the debt divided by the value of the equity euqals one). The beta of the equity is 1.2 and the beta of the debt is 0.1. The risk free rate is 5% and the return on the market index is 10%. What is the WACC (weighted average cost of capital) for the firm? Suppose the firm above increases its borrowing so that the debt-equity ratio is 2. The recapitalization...

A firm has a debt-equity ratio of 4. The market value of the firm’s debt and...

A firm has a debt-equity ratio of 4. The market value of the firm’s debt and equity is £5m. What is the value of the firm’s debt? A: £4.0m B: £3.8m C: £4.5m D: £2.6m A firm has a debt-equity ratio of 4. The cost of debt capital is 8% and the cost of equity capital is 12%. What is the weighted average cost of capital for the firm (WACC)? A: 10.1% B: 8.8% C: 9.5% D: 9.2% Suppose Modigliani-Miller...

A firm has a debt-to-equity ratio of 50%. The firm’s equity beta is 1.5 and the...

A firm has a debt-to-equity ratio of 50%. The firm’s equity beta is 1.5 and the cost of debt is 6%. Assume the market risk premium is 6%, the 10-year Treasury bond yield is 3%, and the corporate income tax rate is 40%. Estimate the firm’s WACC. Estimate the firm’s unlevered cost of equity, ku. (Hint: Since the debt ratio is constant, you can assume ktax = ku. Use Equation 3c2.) If the firm plans to increase the debt-to-equity ratio...

A firm has a debt-to-value ratio of 1/3. It has only debt and equity in its...

A firm has a debt-to-value ratio of 1/3. It has only debt and equity in its capital structure. Its before tax cost of debt is 9% and the after tax weighted average cost of capital (WACCAT) is 12%. What is the firm’s cost of equity if the tax rate for the firm is 35%? 16.050% 15.075% none of these 18.000% 9.000%

Company has debt-to-total assets ratio is 0.4. What is its debt to equity ratio

Currently the firm has total market value of debt $20 million and total market value of...

Currently the firm has total market value of debt $20 million and total market value of equity $60 million. This capital structure is considered optimal by the management. The optimal capital budget for new investment for the coming period is determined to be $15 million. The total net income is estimated to be $20 million. The firm has 5 million common shares outstanding. The most recent dividend per share is $1 and the management intends to maintain it for the...

a firm has total assets of $79,600, cash of $25,000 and a debt-equity ratio of 0.25....

a firm has total assets of $79,600, cash of $25,000 and a debt-equity ratio of 0.25. What is the equity multiplier?

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