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consider one company whose EBIT is $10 million every year.It has $40 million riskless debts.It also has 1 million outstanding shares. it costs of equity capital is 11.33%.Assume that the interest rate is 8% and the income tax rate is 33%.Now the company decides to issue additional shares to reduce $10 million debts.How many NEW shares should it issue?

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Basic Finance, Finance

Category:- Basic Finance
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