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What is the firms WACC after borrowing

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Reference no: EM133328221

Question: Cede & Co. expects its EBIT to be $72,205 every year forever. The firm can borrow at 12%. Cede currently has no debt, and its cost of equity is 26%. The tax rate is 34%.

What is the firm's WACC after borrowing $45,000 and using the proceeds to repurchase shares (i.e., after recapitalization)? (Answer in percentage terms and round to 2 decimal places. Do not round intermediate calculations.)

Reference no: EM133328221

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