Question
Cede & Co. expects its EBIT to be $76,646 every year forever. The firm can borrow at 9%. Cede currently has no debt, and its
Cede & Co. expects its EBIT to be $76,646 every year forever. The firm can borrow at 9%. Cede currently has no debt, and its cost of equity is 21%. The tax rate is 33%.
What is the firm's WACC after borrowing $45,000 and using the proceeds to repurchase shares (i.e., after recapitalization)?
(Answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations.)
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International Financial Reporting Standards An Introduction
Authors: Belverd Needles, Marian Powers
2nd edition
053847680X, 978-1111793234, 1111793239, 978-0538476805
