Cede amp co expects its ebit to be 63000 every year forever, Financial Management

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Cede amp co expects its ebit to be 63000 every year forever

Cede & Co expects its EBIT to be $63,000 every year forever. The firm can borrow at 7%. Cede currently has no debt, its cost of equity is 13% and the tax rate is 35%. Assume the company borrows $169,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization? (Do not round intermediate calcuations. Round answer to 2 decimal places)

What is the WACC? (Do not round intermediate calcuations. Round answer to 2 decimal places)

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Financial Management: Cede amp co expects its ebit to be 63000 every year forever

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Financial Management: Cede amp co expects its ebit to be 63000 every year forever

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