Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 2.6, Problem 2CC
Summary Introduction

To discuss: The difference between firm’s book debt equity ratio and market debt equity ratio

Introduction:

The proportion of debt with shareholders equity to finance a company’s assets is termed as debt-equity ratio.

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How does the debt-to-equity ratio affect the return on equity?
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Is there a readily recognisable debt-to-equity ratio that maximises a firm's value? What are your reasons for or against?

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What is WACC-Weighted average cost of capital; Author: Learn to invest;https://www.youtube.com/watch?v=0inqw9cCJnM;License: Standard YouTube License, CC-BY