Biotec has estimated the costs of debt and equity capital, Ask an Expert

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Biotec has estimated the costs of debt and equity capital for various proportions of debt in its capital structure: % of Debt Cost of Debt Cost of Equity 35 5.4% 13.8% 40 5.6 14.0 45 5.9 14.3 50 6.4 14.7 If Biotec pays a current dividend of $1.50 and expects dividends to grow at a constant rate of 7%, what is the stock price if it obtains its optimal capital structure?

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Financial Management, Finance

Category:- Financial Management
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