What is the firms cost of equity capital

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Question: Cede & Co. expects its EBIT to be $73,935 every year forever. The firm can borrow at 11%. Cede currently has no debt, and its cost of equity is 26%. The tax rate is 35%.

What is the firm's cost of equity capital after borrowing $45,000 and using the proceeds to repurchase shares (i.e., after recapitalization)?

 

Reference no: EM133332186

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