Question: If you could please show work. thank you! Question 1 - 13 [Q1-5] The debt-to-equity ratio of your firm is currently 1/2. Under this capital
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If you could please show work. thank you!
Question 1 - 13 [Q1-5] The debt-to-equity ratio of your firm is currently 1/2. Under this capital structure, the cost of equity is 12%. You are planning to change your firm's capital structure so that the new debt-to-equity ratio becomes 2. The change in the debt-to-equity ratio is expected to be permanent. Assume that regardless of the firm's capital structure, the cost of debt is 6% and the corporate tax rate is 40%. What is the WACC under the current capital structure? QueSLIUI IU What is Firm X's cost of equity? * 10% Question 11 If the corporate tax rate is 50%, what is Firm X's WACC? @ 10%
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