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MC.14.085.Algo Question 38 of 50 Dye Industries currently uses no debt, but its new CFO is considering changing the capital structure to 38.0% debt (wa)

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MC.14.085.Algo Question 38 of 50 Dye Industries currently uses no debt, but its new CFO is considering changing the capital structure to 38.0% debt (wa) by issuing bonds and using the proceeds to repurchase and retire some common shares so the percentage of common equity in the capital structure we = 1 - wd declines. Given the data shown below, by how much would this recapitalization change the firm's cost of equity, i.e., what is ru- ru? Do not round your intermediate calculations, Risk-free rate. TRF 5.50% Tax rate. T 25% Market risk prem RPM 3.5096 Current wa 0% Current beta, bu 1.55 Target wa 38.00% 2.3.92 p.pl 6.6.64 p.pl 2.49 p.pl O d. 0.83 pe 0.3.33p.pl M

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