How many new shares should it issue


Consider one company whose EBIT is $10 million every year.It has $40 million riskless debts.It also has 1 million outstanding shares. it costs of equity capital is 11.33%.Assume that the interest rate is 8% and the income tax rate is 33%.Now the company decides to issue additional shares to reduce $10 million debts.How many NEW shares should it issue?

Request for Solution File

Ask an Expert for Answer!!
Business Management: How many new shares should it issue
Reference No:- TGS097523

Expected delivery within 24 Hours