Case#31: an Introduction to Debt Policy and Value
Submitted by: Submitted by mike
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Pages: 6
Category: Business and Industry
Date Submitted: 05/11/2010 05:55 PM
Case#31: An Introduction to Debt Policy and Value
#1 Please fill in the following:
| | |0% Debt/ |25% Debt/ |50% Debt/ |
| | |100% Equity |75% Equity |50% Equity |
|Book Value of Debt | |0 |2500 |5000 |
|Book Value of Equity | |10000 |7500 |5000 |
| | | | | |
|Market Value of Debt | |0 |2500 |5000 |
|Market Value of Equity | |10000 |8350 |6700 |
| | | | | |
|Pretax Cost of Debt | |5,00% |5,00% |5,00% |
| | | | | |
|After-Tax Cost of Debt | |3,30% |3,30% |3,30% |
| | | | | |
|Market Value Weights of | | | | |
| Debt | |0% |23,04% |42,74% |
| Equity | |100% |76,96% |57,26% |
|Unlevered/Levered Beta | |...
