need help. The CEO of LevCo is considering a leverage recapitalization and wants to know the new cost of equity (AKA Ke) post recap. Currently LevCO has assets of $ 35 MM and $ 10 MM in debt. It is considering adding $5 MM in new Debt to repurchase shares. Its closest peer has a 0.5 Debt to equity ratio and an equity beta of 1.35. Again 10 year treasuries are 2% and the expected market return is 8%. the corporate tax rate is 35%. what is the new equity beta and Ke post recap?

for personal use. we have no homework in this course. I would like the explanation for learn more on the subject.