Solution-What is shadow cost of equity

What is shadow cost of equity

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Reference no: EM133111077

Shadow Corp. has no debt but can borrow at 8%. The firm's WACC is currently 11%, and the tax rate is 35%

a. What is Shadow's cost of equity?

b. If the firm converts to 25% debt, what will its cost of equity be?

c. If the firm converts to 50% debt, what will its cost of equity be?

d. What is Shadow's WACC in part (b) and (c)?

Reference no: EM133111077

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What is shadow cost of equity

Reference no: EM133111077

Reference no: EM133111077

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