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A company has an EBIT of 4405 in perpetuity. The unlevered cost of capital is 15.74% and there are 25010 common shares outstanding. The
A company has an EBIT of 4405 in perpetuity. The unlevered cost of capital is 15.74% and there are 25010 common shares outstanding. The company is considering issue $9660 in new bonds at par to add financial leverage. The proceeds of the debt issue will be used to repurchase equity. The YTM of the new debt is 10.83% and the tax rate is 32% what is the cost of the levered equity after restructuring?
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Matlab An Introduction with Applications
Authors: Amos Gilat
5th edition
1118629868, 978-1118801802, 1118801806, 978-1118629864
