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The two inputs are thus the personal debt ratio in full cash and the relevant debt servicing Expense. The expense of personal debt for the many divisions of MC is calculated using the down below two inputs;
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The corporation’s CEO desires To maximise the debt stages on the High County’s stability sheet and utilizing the debt proceeds to repay the financial debt. It's assumed that the utmost volume of personal debt could well be retained fifty% of the entire fairness right after deducting The existing liabilities from the entire belongings. The debt degree equalled to $four.862 million (See Appendix six) once the proposed credit card debt maximization assumption.
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