Question
Consider an all-equity firm whose unlevered cost of equity is 12%. It conducts a leveraged share repurchase that issues debt at 6% to repurchase its
Consider an all-equity firm whose unlevered cost of equity is 12%. It conducts a leveraged share repurchase that issues debt at 6% to repurchase its shares and has a debt-to-equity of 50% after the recapitalization. What is its cost of equity after the recapitalization?
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes, Melissa Hart
7th Edition
1265521972, 978-1265521974
