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Category > Business & Finance Posted 21 May 2017 My Price 11.00

The company has no growth opportunities

The company has no growth opportunities (g = 0), so the company pays out all of its earnings as dividends (EPS = DPS). The consultant believes that if the company moves to a capital structure financed with 20% debt and 80% equity (based on market values) that the cost of equity will increase to 11% and that the pre-tax cost of debt will be 10%. If the company makes this change, what would be the total market value (in millions) of the firm?

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Status NEW Posted 21 May 2017 08:05 AM My Price 11.00

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