Macro has an EBIT of $400,000. The firm currently has a debt of $15,00,000 at an average cost of k d 1 answer below »


Macro has an EBIT of $400,000. The immovable vulgarly has a debit of $15,00,000 at an middle consume of kd of 10%. The consume of equity is estimated to be ke 16%.
i) Determine the vulgar estimate of the immovable using transmitted valuation method
ii) Determine the immovable's overall importantization rate
iii) The immovable is because to upshot important of $5,00,000 in prescribe to rescue $5,00,000 of debit. The consume of debit is unchanged.However the company's consume of equity is expected to be reduced to 14% as a issue of curtail in leverage. Would you reccomend this resuscitation?