Question: Elzear & Co . expects its EBIT to be $ 7 4 , 0 0 0 every year forever. The firm can borrow at 7

Elzear & Co. expects its EBIT to be $74,000 every year forever. The firm can borrow at 7%. Elzear currently has no debt, and its cost of equity is 12% and the tax rate is 35%. The company borrows $125,000 and uses the proceeds to repurchase shares. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)
What is the cost of equity after recapitalization?
Cost of equity
%
What is the WACC?
WACC

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