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What is the cost of equity after recapitalization

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Reference no: EM133115339

A company expects its EBIT to be $67,000 every year forever. The firm can borrow at 7 percent. The firm currently has no debt, its cost of equity is 9 percent, and the tax rate is 35 percent. Assume the firm borrows $177,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization?

Cost of equity%

What is the WACC?

WACC%

Reference no: EM133115339

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