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booboo123 booboo123
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2 months ago
Cynergy Inc. currently has a debt-equity ratio of 0.70, an after-tax cost of debt of 7.5%, and a cost of equity of 14%. If the firm changes its debt-equity ratio to 0.40, it will

▸ not have an effect on the firm's capital budgeting decisions.

▸ cause the NPV of projects under consideration to decrease.

▸ decrease the firm's WACC.

▸ increase the firm's total debt.
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
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birdnuggetbirdnugget
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2 months ago
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This site is awesome
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