thats exactly how it was phrased in our homework

and Company Bhoone Company A are identical in all respects except for capital structure Company A has a total value of 3 a cost of Equity of 15% Company B has debt of 7 million and pays Interest on this debt at a rate of 10% Taxes are paid at A Rate of 30% But Markets are otherwise perfect. What is the cost of Equity in Company B. A 17. 17 % -> 15% -> 16.52% D -) 16.06% A Firm that is currently entirly financed with equitu decides to Introduce debt into its capital structure Assume that markets are perfect except for the existance of taxes which are paid at a rate of 30% What effect will the introduction of debt have on the company A Value of Firm will increase and the overall cost of capital will increase B Value of Firm will remain the same and overall cost of cap will remain the same e Value of Firm will increase and the overall cost of Captal will decrease 11 Value of Firm will decreuse and the cost of capital will increase