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Please help me answer HAMADA EQUATION Situational Software Co. SSC) is trying to establish its optimal capital structure. Its current capital structure consists of 20%
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HAMADA EQUATION Situational Software Co. SSC) is trying to establish its optimal capital structure. Its current capital structure consists of 20% debt and 80% equity, however, the CEO believes that the firm should use more debt. The risk-free rate, RF, is 696; the market risk premium, RPM, is 596; and the firm's tax rate is 40%. Currently, SSC's cost of equity is 13%, which is determined by the CAPM. what would be SSC's estimated cost of equity if it changed its capital structure to 50% debt and 50% equity? Round your answer to two decimal places. Do not round intermediate stepsStep by Step Solution
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