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Please show all work! Dyson Inc. currently finances with 20.0% debt (i.e., wd=20% ), but its new CFO is considering changing the capital structure so
Please show all work!
Dyson Inc. currently finances with 20.0% debt (i.e., wd=20% ), but its new CFO is considering changing the capital structure so wd=74.5% by issuing additional bonds and using the proceeds to repurchase and retire common shares so the percentage of common equity in the capital structure (wc)=1wd. Given the data shown below, by how much would this recapitalization change the firm's cost of equity? Do not round your intermediate calculations. (Hint: You must unlever the current beta and then use the unlevered beta to solve the problem.)Step by Step Solution
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