What is cost of equity after recapitalization

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Reference no: EM131334446

Cede & Co. expects its EBIT to be $49,000 every year forever. The firm can borrow at 8 percent. Cede currently has no debt, its cost of equity is 11 percent, and the tax rate is 35 percent. Assume the company borrows $142,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Cost of equity %

What is the WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

WACC %

Reference no: EM131334446

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