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What is the firm cost of equity

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Question - Shadow Corp. has no debt but can borrow at 6.3 percent. The firm's WACC is currently 8.1 percent, and the tax rate is 35 percent.

a. What is the firm'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 50 percent debt, what will its cost of equity be?

d-1 If the firm converts to 30 percent debt, what will the company's WACC be?

d-2 If the firm converts to 50 percent debt, what will the company's WACC be?

Reference no: EM132968872

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