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What is SURIA's weighted average cost of capital after the recapitalization? (NOTE: Round off your answer to TWO decimal places)* Currently, SURIA Corporation's balance sheet
What is SURIA's weighted average cost of capital after the recapitalization? (NOTE: Round off your answer to TWO decimal places)* Currently, SURIA Corporation's balance sheet at the end of the previous accounting period is as follows: Assets 500 million 100 million 400 million Debt P Common Equity Total debt and common equity_P Total assets P 500 million 500 million The book value of the company (both debt and common equity) equals its market value. Furthermore, the company has determined the following information: The company's before-tax cost of debt is 7.5 percent The company's current beta is 1.10 The risk-free rate is 5 percent The market risk premium is 6 percent The company's tax rate is 40 percent For the coming year, SURIA is considering a recapitalization. The proposed plan is to issue additional P100 million of debt and use the proceeds to repurchase the same amount of common equity. As a result of this recapitalization, the firm's value will not change
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