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JKL is an all equity firm. its current WACC is 10%. the company is thinking about borrowing some money to buy back some of its
JKL is an all equity firm. its current WACC is 10%. the company is thinking about borrowing some money to buy back some of its outstanding shares. it would borrow until the debt/equity ratio was 1.8. with that amount of debt its cost of debt capital would be 4%. what will be the expected return on the equity after the transaction is completed?
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