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How should we estimate the mix of equity and debt in the firm’s capital structure, and...

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Finance

  1. How should we estimate the mix of equity and debt inthe firm’s capital structure, and what will make itchange?

b, How can we combine this information in order to estimate acompany’s weighted average cost of capital (WACC), andwhat does that estimate tell us?

Answer & Explanation Solved by verified expert
3.6 Ratings (608 Votes)
To get the mix of debt and equity 1 First get the market value of debt no of Units issued current market price 2 now we shall get the value of equity no of units of common stock issuedcurrent market price 3 to get the total value of corporation add value of debt and value of equity    See Answer
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How should we estimate the mix of equity and debt inthe firm’s capital structure, and what will make itchange?b, How can we combine this information in order to estimate acompany’s weighted average cost of capital (WACC), andwhat does that estimate tell us?

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