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Duke Energy has 3 billion shares of common stock s...

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Duke Energy has 3 billion shares of common stock selling at $19 each. It has $25 billion in bonds with coupon rate of 8%, selling at par. Duke Energy needs $10 billion in new capital, which it can raise by selling stock at $18 per share, or bonds at 9% interest. The expected EBIT after the new capitalization is $6 billion, with a standard deviation of $3 billion. What is the preferred method of raising new capital? What is the probability that you are right?,Good morning Thank you for the quick response. Has proven helpful!

 

Paper#10137 | Written in 18-Jul-2015

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