Jason's company is currently financed with 100% Equity with a required return of 15% and contemplating issuing debt and buying back equity to change the capital structure. Debt can be issued with an 10% cost of debt. The current tax rate is 30%. After issuing debt to increase the Debt-to-equity ratio to 1, Jason's Weighted Average Cost of Capital (WACC) is?

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To calculate the new Weighted Average Cost of Capital WACC after issuing debt an... View the full answer