fill in the following table, assets required for operation $2000
Case A - firm uses onlyequity financing
Case B - firm uses 30% debt with a 10%interest rate and 70% equity
Case C - firm uses 50% debt with a 12% interst rate and 50% equity
What table?
To fill in the table, we need to calculate the amounts for assets required for operation in each case.
Case A - Firm uses only equity financing:
In this case, the total assets required for operation are $2000.
Case B - Firm uses 30% debt with a 10% interest rate and 70% equity:
To calculate the assets required for operation in this case, we need to determine the amount of debt and equity.
Debt portion:
The debt portion is 30% of the total assets required for operation, which is $2000. Therefore, the debt is 30% of $2000, which equals $600.
Equity portion:
The equity portion is 70% of the total assets required for operation, which is $2000. Therefore, the equity is 70% of $2000, which equals $1400.
Case C - Firm uses 50% debt with a 12% interest rate and 50% equity:
To calculate the assets required for operation in this case, we need to determine the amount of debt and equity.
Debt portion:
The debt portion is 50% of the total assets required for operation, which is $2000. Therefore, the debt is 50% of $2000, which equals $1000.
Equity portion:
The equity portion is 50% of the total assets required for operation, which is $2000. Therefore, the equity is 50% of $2000, which equals $1000.
Now, we can fill in the table:
```
Case Debt Equity
--------------------------------------
A $0 $2000
B $600 $1400
C $1000 $1000
```
Note: The interest rates given for the debt in Case B and Case C are not used in calculating the assets required for operation. They are provided to show the cost of debt financing for each case.