Draw the wacc of the firm as a function of its debt ratio

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Reference no: EM131241332

1. If you are thinking of debt in terms of a (constant) fraction of firm value, would you prefer WACC or APV? If you are thinking of debt in terms of a (constant) dollar amount, would you prefer WACC or APV?

2. From memory, draw the WACC of the firm as a function of its debt ratio if the only market imperfection is the corporate income taxes.

Reference no: EM131241332

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