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What is jal cost of equity

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Reference no: EM132951978

Assume that Joe's Appliance's Ltd (JAL) exists in a "Modigliani and Miller" (MM) world with corporate taxes, but all other MM assumptions hold. JAL forecasts that its EBIT will not grow in future years, that is, its most recent EBIT will become a perpetuity. JAL has an unlevered cost of equity (rsU) of 10%, its cost of debt is 8%. Use the most recent debt/equity figure provided in the ratio section as the necessary capital structure information for calculation purposes.

1) What is JAL's cost of equity?

2) What is JAL's total value?

Reference no: EM132951978

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