Question: Chapter 16 Capital Structure 513 6. Suppose Microsoft has no debt and a WACC of 9.2%. The average debt-to-value ratio for the software industry is

Chapter 16 Capital Structure 513 6. Suppose Microsoft has no debt and a WACC of 9.2%. The average debt-to-value ratio for the software industry is 5%. What would be its cost of equity if it took on the aver- age amount of debt for its industry at a cost of debt of 6%

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