Question
ABC Company has a cost of equity of 10%. EBIT is 100. They currently have no debt.What isthe new cost of equity if they changed
ABC Company has a cost of equity of 10%. EBIT is 100. They currently have no debt.What isthe new cost of equity if they changed to using a capital structure that used 40% debt and 60% equity. The interest rate on the debt is 5% and the tax rate is 40%.
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
11th edition
324422870, 324422873, 978-0324302691
