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What is pacific company cost of equity

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Reference no: EM132796907

Under the tax rate of 40%, an unlevered firm Pacific Company's WACC is currently 14 percent. The company can borrow at 6 percent.

a. What is Pacific Company's cost of equity?

b. If the firm converts to 30 percent debt, what will its cost of equity be?

c. If the firm converts to 55 percent debt, what will its cost of equity be?

d. What is Pacific Company's WACC in part (b)? In part (c)?

Reference no: EM132796907

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