Occidental Oman has issued a new bond, which has increased the company’s debt/ equity ratio from 33 percent to 53 percent. You are a stockholder in Occidental Oman. Discuss how this change would affect your required rate of return on the common stock of the Occidental Oman. Why?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
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Occidental Oman has issued a new bond, which has increased the company’s debt/ equity ratio from 33 percent to 53 percent. You are a stockholder in Occidental Oman. Discuss how this change would affect your required rate of return on the common stock of the Occidental Oman. Why?

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