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Business, 20.12.2019 00:31 murrachl000

The foreseeable future company (ffc) operates in a world of certainty where corporate tax rates are 40%. the current owners of the company, whose only assets are a new technological process for extracting wine from water, can generate $450 once and only once one period later for an investment of $150. ffc can borrow up to $100 using debt (any more debt is strictly prohibited by world of certainty statutes); the rest must be equity. work out the company's debt-equity ratio if interest rates are 10%. determine a number of shares to be issued, the value of the existing owner's equity, and the weighted average cost of capital (wacc). if the company could increase its debt-equity ratio, would anyone benefit? if so, who, and why?

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