Question: Fields & Company expects its EBIT to be $107,000 every year forever. The firm can borrow at 7 percent. The company currently has no debt,

Fields & Company expects its EBIT to be $107,000 every year

Fields & Company expects its EBIT to be $107,000 every year forever. The firm can borrow at 7 percent. The company currently has no debt, and its cost of equity is 11 percent and the tax rate is 21 percent. The company borrows $162,000 and uses the proceeds to repurchase shares. a. What is the cost of equity after recapitalization? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of equity b. WACC % %

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