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Bien Company currently has no debt but it can borrow at 5%. The firm has a WACC of 9.5% and its tax rate is 35%.
Bien Company currently has no debt but it can borrow at 5%. The firm has a WACC of 9.5% and its tax rate is 35%.
a.) Whats the firms cost of equity unlevered?
b.) If the firm converts to 50% debt level, what the firms equity cost will be?
c.) Whats the firms WACC at 50% debt level?
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, William J. Kretlow
11th Edition
0324653506, 978-0324653502
