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3 Homework: Chapter 16 Homework Question 3, P16-12 (simil... Part 1 of 2 HW Score: 33.33%, 3 of 9 point Score: 0 of 1 Modigliani

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3 Homework: Chapter 16 Homework Question 3, P16-12 (simil... Part 1 of 2 HW Score: 33.33%, 3 of 9 point Score: 0 of 1 Modigliani and Miller's world of no taxes. Roxy Broadcasting, Inc. is currently a low-levered firm with a debt-to-equity ratio of 2/7. The company wants to increase its leverage to 7/2 for debt to equity. If the current return on assets is 12% and the cost of debt is 9%, what are the current and the new costs of equity if Roxy operates in a world of no taxes

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