Assume the MM (1958) theory holds. A firm has a debt-to-equity ratio of 0.5. Its levered cost
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Assume the MM (1958) theory holds. A firm has a debt-to-equity ratio of 0.5. Its levered cost of equity is 12%, and its cost of debt is 4%. What would be its cost of equity if the debt-to-equity ratio were zero? In other words, what would be the cost of equity if the firm was unlevered?
Related Book For
Fundamentals Of Financial Management
ISBN: 9780357517574
16th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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