Question
An unlevered firm has expected earnings of $410,000 and a market value of equity of $2,100,000. The firm is planning to issue $840,000 of debt
An unlevered firm has expected earnings of $410,000 and a market value of equity of $2,100,000. The firm is planning to issue $840,000 of debt at 5.8 percent interest and use the proceeds to repurchase shares at their current market value. Ignore taxes. What will be the cost of equity after the repurchase?
| 24.54% | ||
| 25.79% | ||
| 26.81% | ||
| 27.42% | ||
| 28.67% |
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Health Care Finance Basic Tools For Nonfinancial Managers
Authors: Judith Baker
2nd Edition
0763726605, 9780763726607
