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Company XYZ expects an EBIT of $ 1 9 0 , 0 0 0 every year forever. The firm currently has no debt, and its

Company XYZ expects an EBIT of $190,000 every year forever. The firm currently has no debt, and its cost of equity is 16%. The firm can borrow $3,200,000 at 10% and buy back shares. The corporate tax rate is 35%. what would be XYZ cost of equity after the recapitlaiztion

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