Maria's car dealership is currently all equity financed, and has a cost of equity of 14.0%....

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Maria's car dealership is currently all equity financed, and has a cost of equity of 14.0%. After some consideration, she decided that she could significantly cut her tax bill without risking financial distress if 47% of her firm was financed with perepetual debt. She can borrow at 6.2%, and her tax rate is 23%. What will Maria's cost of equity be according to Modigliani-Miller? Please enter your answer as a decimal to at least three places - 8.6% should be 0.086, for example. Maria's car dealership is currently all equity financed, and has a cost of equity of 14.0%. After some consideration, she decided that she could significantly cut her tax bill without risking financial distress if 47% of her firm was financed with perepetual debt. She can borrow at 6.2%, and her tax rate is 23%. What will Maria's cost of equity be according to Modigliani-Miller? Please enter your answer as a decimal to at least three places - 8.6% should be 0.086, for example.

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According to ModiglianiMiller the cost of equity Ke is given ... View the full answer