What is cost of equity after recapitalization

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Reference no: EM131994440

Meyer & Co. expects its EBIT to be $66,000 every year forever. The firm can borrow at 8 percent. Meyer currently has no debt, and its cost of equity is 14 percent and the tax rate is 35 percent. The company borrows $140,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization?

What is the WACC?

Reference no: EM131994440

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