3.WenShan Corporation expects an EBIT of $2,000,000 every year forever. WenShan Corporation currently has
no debt, and its cost of equity is 12 percent. The firm can borrow at 10 percent.
申論題內容
(3) (5%) Please discuss advantages and disadvantages if WenShan Corporation use 100% of debt. Note: The
answer for this sub-question should be written within 5 lines. Any information exceeds 5 lines will not be
graded.