FMCG Inc an all equity firm with 9200 shares outstanding with 70 percent payout is considering a capital structure with 35% debt. The current trading price of the stock is $45 and a constant Earnings...

FMCG Inc an all equity firm with 9200 shares outstanding with 70 percent payout is considering a capital structure with 35% debt. The current trading price of the stock is $45 and a constant Earnings before interest and taxes equal to $85.000. If the interest rate on new debt is 6 percent and there are no taxes. If you own $9000 worth of stock in the company, what would be your cash flow with the change in the capital structure? 1. No of shares owned by you initially (before the change in capital structure) 2. Net income and EPS after change in capital structure 3. What will be your total cash flow after change in capital structure

Jun 02, 2022
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