What is delphi cost of equity

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Reference no: EM132867317

Delphi Ltd has no debt but can borrow at 8%. The firm's WACC is currently 12%. Assuming no corporate taxes:

i. What is Delphi's cost of equity?

ii. If the firm converts to 40% Debt, what will Delphi's cost of equity be?

iii. Using MM proposition II what will be Delphi's WACC in part (ii) above?

Please solve it in the full formula and detail

Reference no: EM132867317

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