Question
Cede & Co. expects its EBIT to be $72,205 every year forever. The firm can borrow at 12%. Cede currently has no debt, and its
Cede & Co. expects its EBIT to be $72,205 every year forever. The firm can borrow at 12%. Cede currently has no debt, and its cost of equity is 26%. The tax rate is 34%.
In percentage terms and rounded to two decimal points, what is the firms WACC after borrowing $45,000 and using the proceeds to repurchase shares (i.e., after recapitalization)?
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Technical Analysis Of Stock Trends
Authors: Robert D. Edwards, John Magee, W.H.C. Bassetti
10th Edition
1439898189, 978-1439898185
