What is the firm WACC after borrowing

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Reference no: EM131896903

Cede & Co. expects its EBIT to be $82617 every year forever. The firm can borrow at 11%. Cede currently has no debt, and its cost of equity is 21%. The tax rate is 33%. Hint: MM Propositions I & II with Taxes.

What is the firm’s WACC after borrowing $45,000 and using the proceeds to repurchase shares (i.e., after recapitalization)?

Reference no: EM131896903

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