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please show in excel Bumpkins currently finances with 30.0% debt (i.e., Wo = 30%), but its new CFO is considering changing the capital structure to

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Bumpkins currently finances with 30.0% debt (i.e., Wo = 30%), but its new CFO is considering changing the capital structure to Wq = 60.0% by issuing additional bonds and using the proceeds to repurchase and retire common shares so the percentage of common equity in the capital structure = 1 - Wg. Given the data shown below, by how much would this recapitalization change the firm's cost of equity? Risk Free Rate Mkt Risk premium Current Beta 5% 5% 1.05 Tax rate Current Debt weight Target debt weight 40% 30% 60% Current cost of eq Unlevered Beta New Beta New cost of equity Change in cost

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