What is cost of equity

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Murphy Ink has bonds outstanding with a face value of $145,000.00 that are selling at par. It also has 12,000 shares of stock outstanding that are selling for $22.25 a share. The all-equity value of the firm is $425,000.00. The tax rate is 35.00%. By what amount has the value of the firm been decreased by the expected bankcruptcy costs? Assume there are no other claims on the firm. PART 2 The iggy corporation stock has a beta that is 15.00% higher than the overall market beta. The risk free rate is 2.25% and the market rate of return is 8.75%. What is the cost of equity?

Reference no: EM131933845

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