Debt is? risk-free-what is the interest rate on the? debt

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Reference no: EM131188453

Hubbard Industries is an? all-equity firm whose shares have an expected return of 9.4 %. Hubbard does a leveraged? recapitalization, issuing debt and repurchasing? stock, until its? debt-equity ratio is 0.49. Due to the increased? risk, shareholders now expect a return of 13.2 %. Assuming there are no taxes and? Hubbard's debt is? risk-free, what is the interest rate on the? debt? Please show all work

Reference no: EM131188453

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