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Business Finance Suppose that Inovio Pharmaceuticals currently has no debt and has an equity cost of capital of 12%. Inovio is considering borrowing funds at
Business Finance
Suppose that Inovio Pharmaceuticals currently has no debt and has an equity cost of capital of 12%. Inovio is considering borrowing funds at a cost of 5% and using these funds to repurchase existing shares of stock. Assume perfect capital markets. If Inovio borrows until they achieved a debt-to-value ratio of 50%, then what is Inovio's levered cost of equity equal to? Explain yourStep by Step Solution
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