Your firm is risky so its unlevered cost of equity is 4, Financial Management

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Your firm is risky so its unlevered cost of equity is 4

You purchase a small business that is valued at $188447. You decide to borrow $62916 at 8% interest and pay for the rest with equity. The debt is due in one year, and you expect the firm to have cash flows of $67332 in one year. Your firm is risky, so its unlevered cost of equity is 4 percentage points above its cost of debt. What is the cost of equity of the levered firm?

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Financial Management: Your firm is risky so its unlevered cost of equity is 4

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Financial Management: Your firm is risky so its unlevered cost of equity is 4

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