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Title: Zybeck Corp. projects operating income of $4 million next year. The firm's income tax rate is 40%. ... Post by: papahomer on Jun 1, 2017 Zybeck Corp. projects operating income of $4 million next year. The firm's income tax rate is 40%. Zybeck presently has 750,000 shares of common stock which have a market value of $10 per share, no preferred stock, and no debt. The firm is considering two alternatives to finance a new product: (a) the issuance of $6 million of 10% bonds, or (b) the issuance of 60,000 new shares of common stock at $10 per share. If Zybeck issues common stock this year, what will the firm's return on equity be next year?
A) 16.7% B) 18.2% C) 22.1% D) 26.4% E) 29.6% Title: Re: Zybeck Corp. projects operating income of $4 million next year. The firm's income tax rate is ... Post by: vanrhee on Jun 1, 2017 Content hidden
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