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Meyer & Co. expects its EBIT to be $159,000 every year forever. The firm can borrow at 8 percent. At the moment the company has

Meyer & Co. expects its EBIT to be $159,000 every year forever. The firm can borrow at 8 percent. At the moment the company has no debt, and its cost of equity is 15 percent. The tax rate is 24 percent. The company borrows $201,000 and uses the proceeds to repurchase shares. a. What is the cost of equity after recapitalization? What is the WACC after recapitalization?

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