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Business, 17.12.2019 20:31 noemir42

Technico has determined that its optimal capital structure is 40% debt, at which point its weighted cost of capital, ka, is 13.7%. due to financial problems, the firm has decided to raise the proportion of debt to 50%, which will increase its weighted cost of capital to 14.4%. what is the effect on the stock price of technico? the current dividend is $1.60 and the long-term growth rate of dividends is expected to be 8.5%.

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Technico has determined that its optimal capital structure is 40% debt, at which point its weighted...
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