Capital structure analysis the rivoli company has no debt
Capital Structure AnalysisThe Rivoli Company has no debt outstanding, and its financial position is given by the following data:Assets (Market value = book value) $3,000,000EBIT $500,000Cost of equity, rs 10%Stock price, Po $15Shares outstanding, no 200,000Tax rate, T (federal-plus-state) 40%The firm is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 30% debt based on market […]
