Interest rate on the? debt-hubbard industries

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Hubbard Industries is an? all-equity firm whose shares have an expected return of 9.7%. Hubbard does a leveraged? recapitalization, issuing debt and repurchasing? stock, until its? debt-equity ratio is 0.52. Due to the increased? risk, shareholders now expect a return of 13.9%. Assuming there are no taxes and? Hubbard's debt is? risk-free, what is the interest rate on the? debt?

The interest rate is ?%. ?(Round to two decimal? places.)

Reference no: EM132658681

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