Question: Fields & Company expects its EBIT to be $91,000 every year forever. The firm can borrow at 7 percent. The company currently has no debt,

Fields & Company expects its EBIT to be $91,000 every year forever. The firm can borrow at 7 percent. The company currently has no debt, and its cost of equity is 12 percent and the tax rate is 22 percent. The company borrows $150,000 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

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