Situational Software Co . ( SSC ) is trying to establish its optimal capital structure. Its current
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Question:
Situational Software CoSSC is trying to establish its optimal capital structure. Its current capital structure consists of debt and equity; however, the CEO believes that the firm should use more debt. The riskfree rate, rRF is ; the market risk premium, RPM is ; and the firm's tax rate is Currently, SSCs cost of equity is which is determined by the CAPM. What would be SSCs estimated cost of equity if it changed its capital structure to debt and equity? Do not round intermediate calculations. Round your answer to two decimal places.
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