What will be cost of equity if debt-equity ratio is revised
Problem
Home Decor has a debt-equity ratio of .54. The cost of equity is 15.7 percent, the pretax cost of debt is 6.8 percent, and the tax rate is 22 percent. What will be the cost of equity if the debt-equity ratio is revised to .65?
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Home Decor has a debt-equity ratio of .54. The cost of equity is 15.7 percent. What will be the cost of equity if the debt-equity ratio is revised to .65?
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