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What will be cost of equity if firm has no debt

Shadow corp. has no debt but can borrow at 6.5%. The firm's WACC is currently 10.4% and the tax rate is 35%

a) What is Shadows cost of equity?
b) If the firm converts to 25% debt, what will its cost of equity be?
c) If the firm converts to 50% debt, what will its cost of equity be?

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What will be cost of equity if firm has no debt

Reference No:- TGS0675149

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What will be cost of equity if firm has no debt

Reference No:- TGS0675149

Recent Questions Asked Finance Basics

Q : Prepare a production budget by quarters

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