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Olympic Lanes is currently worth 8 million dollars and is all equity - financed. The company's current cost of equity is 1 1 % Olympic

Olympic Lanes is currently worth

8

million dollars and is all equity

-

financed. The company's current cost of equity is

11 %

Olympic Lanes would like to issue debt worth

2

million dollars with a cost of debt of

5 % .

Assuming the Modigliani

-

Miller Theories hold perfectly, what will Olympic Lanes' new cost of equity be after issuing the debt?

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