Question: Co. expects its EBIT to be $57,000 every year forever. The firm can borrow at 9% and has no debt, cost of equity is 13%,

Co. expects its EBIT to be $57,000 every year forever. The firm can borrow at 9% and has no debt, cost of equity is 13%, tax is 35%. Assume the company borrows $157,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization and WACC?Do not round calculations

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