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Following five problems Current Wd 30% Tax rate 30% Structure Ws 70% WACC 12% Other Rf 5% Tax rate 30% Factors Market Risk Premium

Following five problems Current Wd 30% Tax rate 30% Structure Ws 70% WACC 12% Other Rf 5% Tax rate 30% Factors Market Risk Premium 8% As a CEO, you considering a change to your company's capital structure. The CFO believes the firm should increase the debt ratio (D/E) to 1.5. What is the cost of equity of the target capital structure?

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