The common stock and debt of Nothern Sludge are valued at $64 million and $36 million, respectively. Investors currently require a return of 16.6% on the common stock and return of 7.4 % on the debt. If Northen Sludge issues an additional $18 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? Assume that the change in capital structure does not affect the interest rate on Nothern's debt and that there are no taxes. (Do not round intermediate calculations. Enter your answer as a whole percent.)

What is the new return on equity?

bttps/ewconnect.miheducation.com/flow/connect.html Help Save&Exit S Check my we The common stock and debt of Northern Sludge are valued at $64 million and $36 milion, respectively Investors currently require a return of166% on the common stock and a return of 74% onthe debt "Northern Sudge issues an additional $18 milion of common stock and uses this money to retire debt, what happens to the expected return on the stock? Assume that the change in capital structure does not affect the interest rate on Northern's debt and that there are no taxes. (Do not round intermediate calculations Enter your answer os a whole percent.) retum on equiy Deference inks 5 0