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What is abc cost of equity

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ABC ltd has no debt but can borrow at 8%. the company's WACC is currently 12%, and there is no corporate tax.

1. What is ABC's cost of equity?

2. If the company converts to 30% debt, what will be it's cost of equity?

3. If the comany converts to 60% debt, what will be it's cost of equity?

4. Calculate the WACC in (2) and (3) respectively, compare the WACC's and explain what you have found?

Reference no: EM132719376

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