Question
2.Cummings Corporation has a weighted average cost of capital (WACC) of 10%.The company has no debt, but can borrow at 5%.There is no corporate tax.
2.Cummings Corporation has a weighted average cost of capital (WACC) of 10%.The company has no debt, but can borrow at 5%.There is no corporate tax.
a)What is Cummings' cost of equity?
b)If the firm converts to 30% debt, what will its cost of equity be?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
