Business, 07.11.2019 03:31 mcckenziee

Cede & co. expects its ebit to be $91,000 every year forever. the company can borrow at 7 percent. the company currently has no debt and its cost of equity is 12 percent and the tax rate is 22 percent. the company borrows $150,000 and uses the proceeds to repurchase shares. a. what is the cost of equity after recapitalization? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.) b. what is the wacc? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)

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Cede & co. expects its ebit to be $91,000 every year forever. the company can borrow at 7 perce...