Question: Please show all calculations and formulas.If using Excel, please show data, formulas, etc. Practice example 3: An unlevered firm has expected earnings of $2,401 and

Please show all calculations and formulas.If using Excel, please show data, formulas, etc.

Practice example 3:

An unlevered firm has expected earnings of $2,401 and a market value of equity of $19,600. The firm is planning to issue $4,000 of debt at 6 percent interest and use the proceeds to repurchase shares at their current market value. Ignore taxes. What will be the cost of equity after the repurchase?

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