Suppose a new company decides to raise a total of $200 million, with $100 million as common equity


Suppose a new corporation decides to train a entirety of $200 darling, after a while $100 darling as base equity and $100 darling as long-term something-due. The something-due can be hypothecation bonds or debentures, but by an iron-clad food in its charter, the corporation can never train any attached something-due over the primary $100 darling. Given these provisions, which of the forthcoming statements is CORRECT? a. The preferable the percentage of something-due represented by hypothecation bonds, the causeer twain types of bonds wii be and, accordingly, the preferable the firm's entirety dollar curiosity-behalf mandible succeed be. b. If the something-due were traind by issuing $50 darling of debentures and $50 darling of primary hypothecation bonds, we could be undeniable that the firm's entirety curiosity-behalf payment would be inferior than if the something-due were traind by issuing $100 darling of debentures. c. In this predicament, we cannot betray for unfailing how, or whether, the firm's entirety curiosity-behalf payments on the $100 darling of something-due would be artful by the mix of debentures versus primary hypothecation bonds. The curiosity-behalf admonish on each of the two types of bonds would acception as the percentage of hypothecation bonds used was acceptiond, but the effect command polite be such that the firm's entirety curiosity-behalf mandible would not be artful materially by the mix betwixt the two. d. The preferable the percentage of debentures, the superior the cause borne by each debenture, and thus the preferable the required admonish of repay on the debentures. e. If the something-due were traind by issuing $50 darling of debentures and $50 darling of primary hypothecation bonds, we could be undeniable that the firm's entirety curiosity-behalf payment would be inferior than if the something-due were traind by issuing $100 darling of primary hypothecation bonds.