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 firms 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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Personal Finance
Authors: E Thomas Garman, Raymond E Forgue
10th Edition
143903902X, 9781439039021
