SSU is currently a levered firm with a debt-equity ratio of 0.35 and a pretax cost of debt of 6.2%. The firm has a cost of equity of 12.60%. The firm is considering switching to an all equity firm. What will the firm's cost of equity be if it makes the switch?

Answer rating: 100% (QA)

When a firm switches to an allequity structure it eliminates the cost of debt from its capital struc... View the full answer