A firm with no leverage has an EBIT of $15 million, a corporate tax rate of 20%, an equity value of $200 million and 70 million shares outstanding. The firm plans to borrow $50 million at a cost of 5% per year. You can assume that the debt will stay risk-free. The funds will be used to buy back shares on the market. The new cost of equity after the announcement of this transaction will be

A firm with no leverage has an EBIT of $15 million, a corporate tax rate of 20%, an equity value of $200 million and 70 million shares outstanding. The firm plans to borrow $50 million at a cost of 5% per year. You can assume that the debt will stay risk-free. The funds will be used to buy back shares on the market. The new cost of equity after the announcement of this transaction will be

Explanation:

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know