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Tata Inc. is an all-equity firm in a perfect capital market. The cost of equity is 12%. The firm is going to have a leverage
Tata Inc. is an all-equity firm in a perfect capital market. The cost of equity is 12%. The firm is going to have a leverage recap, which will increase the debt-to-equity ratio to 0.73. If the cost of debt is 6% after the recap and the tax rate is 20%, what is the new cost of equity?
(Please answer with a decimal number with three decimal places.)
Tata Inc. is an all-equity firm in a perfect capital market. The cost of equity is 12%. The firm is going to have a leverage recap, which will increase the debt-to-equity ratio to 0.73. If the cost of debt is 6% after the recap and the tax rate is 20%, what is the new cost of equity?
(Please answer with a decimal number with three decimal places.)
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