What will be the value of equity of hp electronic ltd

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Problem 1: HP electronic Ltd can borrow at 6.0% but has currently had no debt. The cost of equity is 12.5%. The current value of the firm is 500,000. What will be the value of equity if HP electronic borrows $300,000 and uses the proceeds to pay dividends? Assume perfect capital market

Reference no: EM132917397

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