Meyer co expects its ebit to be 83000 every year forever


Meyer & Co. expects its EBIT to be $83,000 every year forever. The firm can borrow at 11 percent. Meyer currently has no debt, and its cost of equity is 15 percent and the tax rate is 35 percent. The company borrows $144,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Cost of equity %

What is the WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

WACC %

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Meyer co expects its ebit to be 83000 every year forever
Reference No:- TGS02704393

Expected delivery within 24 Hours