Constant growth rate of free cash flows is 5%. Rate of return is 10%. Market value of debt=200, number of shares outstanding is 10. The company's total assets are worth 1200, and NOPAT is at 350. Note that the current risk free rate is 3%
Thank you for the opportunity to help you with your question!
Each type of financing should be used with caution and vigilance. Taking
on too much debt can dilute company performance metrics such as the
debt-to-assets and times-interest-earned ratios, as well as reducing
Please let me know if you need any clarification. I'm always happy to answer your questions.
Jun 13th, 2015
Are you studying on the go? Check out our FREE app and post questions on the fly!