question archive Beranek Corp has $570,000 of assets (which equal total invested capital), and it uses no debt—it is financed only with common equity
Beranek Corp has $570,000 of assets (which equal total invested capital), and it uses no debt—it is financed only with common equity
Subject:FinancePrice: Bought3
Beranek Corp has $570,000 of assets (which equal total invested capital), and it uses no debt—it is financed only with common equity. The new CFO wants to employ enough debt to raise the total debt to total capital 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? a. $199,500 b. $99,750 c. $769,500 d. $370,500 e. $422,222
