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Meyer & Co. expects its EBIT to be $115,000 every year forever. The firm can borrow at 9 percent The company currently has no debt,
Meyer & Co. expects its EBIT to be $115,000 every year forever. The firm can borrow at 9 percent The company currently has no debt, and its cost of equity is 13 percent and the tax rate is 23 percent. The company borrows $168,000 and uses the proceeds to repurchase shares a. What is the cost of equity after recapitalization? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % a. Cost of equity b. WACC %
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