What will be the new required return for your firms equity


You are currently the CFO of a firm worth $1 billion and you are considering issuing some additional perpetual debt in order to change your firm's capital structure. Your current beta is 0.93 and you currently have $124 million in debt. You are planning to issue $215 million in additional perpetual debt. Your firm faces a 35% corporate tax rate. Given that the current risk free rate is 2.83% and the current market risk premium is 5.11%, what will be the new required return for your firm's equity holders?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What will be the new required return for your firms equity
Reference No:- TGS02834624

Expected delivery within 24 Hours