What are earnings if the owners put up the $100? Firm's weighted-average cost of capital at various combination of debt and equity. What is the firm's optimal capital structure? If the net present value method is used, which investment(s) should the firm make? Construct a pro forma balance sheet that indicates the firm's optimal capital structure.
Firms' weight average cost of capital and other questions: 1. A firm needs $100 to start and expects: Sales $200 Expenses $185 Tax rate 33% of earnings a. What are earnings if the owners put up the $100? b. If the firm borrows $40 of the initial at 10%, what are the profits rece