What is cost of equity after recapitalization

Assignment Help Financial Management

Reference no: EM131610365

Meyer & Co. expects its EBIT to be $74,000 every year forever. The firm can borrow at 7 percent. Meyer currently has no debt, and its cost of equity is 12 percent and the tax rate is 35 percent. The company borrows $125,000 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.)

What is the WACC? (Do not round)

Reference no: EM131610365

Questions Cloud

List various exceptional conditions : (Exceptional Conditions) List various exceptional conditions that have occurred throughout this text. List as many additional exceptional conditions as you can.

Describe what the arguments are for this function : Describe what the arguments are for this function: =SUMIF(range,criteria,sum_range). Give an example of when this function could be used in a real-life.

Business-to-business marketing communication : What communication vehicle is the primary means of B2B (business-to-business) marketing communication?

Define the type of the object that will be caught by handler : (Catch Parameter) Under what circumstances would you not provide a parameter name when defining the type of the object that will be caught by a handler?

What is cost of equity after recapitalization : What is the cost of equity after recapitalization?

Discuss about the throw statement : A program contains the statement throw; Where would you normally expect to find such a statement? What if that statement appeared in a different part.

Compare exception handling vs other schemes : Compare and contrast exception handling with the various other error-processing schemes discussed in the text.

The cost of the preferred stock : the firm's marginal tax rate is 40% the cost of the preferred stock is ?

Algorithms to obtain some appreciation for the parameters : Compare the performance of two distinct sorting algorithms to obtain some appreciation for the parameters to be considered in selecting an appropriate sort.

User Account

All Pages