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Currently, Meyers Manufacturing Enterprises ( MME ) has a capital structure consisting of 3 5 % debt and 6 5 % equity. MME's debt currently
Currently, Meyers Manufacturing Enterprises MME has a capital structure consisting of debt and equity. MME's debt currently has a yield to maturity. The riskfree rate rRF is and the market risk premium rM rRF is Using the CAPM, MME estimates that its cost of equity is currently The company has a tax rate.
a What is MME's current WACC? Round your answer to decimal places. Do not round intermediate calculations.
What is the current beta on MME's common stock? Round your answer to decimal places. Do not round intermediate calculations.
c What would MME's beta be if the company had no debt in its capital structure? That is what is MME's unlevered beta, bU Round your answer to decimal places. Do not round intermediate calculations.
MME's financial staff is considering changing its capital structure to debt and equity. If the company went ahead with the proposed change, the yield to maturity on the company's bonds would rise to The proposed change will have no effect on the company's tax rate.
d What would be the company's new cost of equity if it adopted the proposed change in capital structure? Round your answer to decimal places. Do not round intermediate calculations.
e What would be the company's new WACC if it adopted the proposed change in capital structure? Round your answer to decimal places. Do not round intermediate calculations.
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