Malkin corp has no debt but can borrow at 7 percent the


Malkin corp has no debt but can borrow at 7 percent. The firm's wacc is currently 11 percent and there is no corporate tax. (a) What is Malkin's cost of equity? (b) If the firm converts to 30 percent debt, what will the cost of equity be? (c) If the firms convert to 60 percent, what will the cost of equity be? What is Malkin's wacc be in part (b)? In part (c)?

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Financial Management: Malkin corp has no debt but can borrow at 7 percent the
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