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Lifter company uses a capital structure consists of 60% debt and 40% equity. Its cost of equity is 15% and cost of debt is 10%.
Lifter company uses a capital structure consists of 60% debt and 40% equity. Its cost of equity is 15% and cost of debt is 10%. It is now considering de leveraging and change to a 30% debt and 70% equity capital structure. What would be its new cost of equity if we assume the cost of debt remains the same? Assume no taxes. O 12% 14.06% 12.86%
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