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Cede & Co. expects its EBIt to be $60,000 every year forever. The firm can borrow at 8 percent. No debt, cost of equity is

Cede & Co. expects its EBIt to be $60,000 every year forever. The firm can borrow at 8 percent. No debt, cost of equity is 13 percent, tax rate is 35 percent. Assume the company borrows $163,000 and uses proceeds to repurchase shares.

What is the cost of equity after recapitalization?

What is the WACC?

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