A company's current E is $50 billion and D is $150 billion. The company's current stock beta
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A company's current E is $50 billion and D is $150 billion. The company's current stock beta is 1.5. Assume that the risk-free rate is 5% and the expected market rate of return is 10%. Now the company issues another $10 billion of debt and uses it to repurchase equity. What is the company’s new cost of equity in percentage?
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Related Book For 
Financial reporting, financial statement analysis and valuation a strategic perspective
ISBN: 978-0324789416
7th Edition
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
Posted Date:
