Target debt ratio of beranek corp


Beranek Corp has $650,000 of assets, and it uses no debt, it is financed only with common equity. The new CFO wants to employ enough debt to raise the debt/assets ratio to 35%, using the proceeds from borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio?

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Finance Basics: Target debt ratio of beranek corp
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