Question
Bruce & Co. expects its EBIT to be $89,000 every year forever. The company can borrow at 5 percent. The company currently has no debt,
Bruce & Co. expects its EBIT to be $89,000 every year forever. The company can borrow at 5 percent. The company currently has no debt, its cost of equity is 8 percent, and the tax rate is 35 percent. The company borrows $102,000 and uses the proceeds to repurchase shares.
| What is the cost of equity after recapitalization? |
| What is the company's WACC? |
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The Nurse Managers Guide To Budgeting And Finance
Authors: Al Rundio
2nd Edition
1940446589, 978-1940446585
