Question: Talus Inc. is considering a financial restructuring. Talus estimates its cost of debt is 7% and its cost of equity is 13%. Talus is considering

Talus Inc. is considering a financial restructuring. Talus estimates its cost of debt is 7% and its cost of equity is 13%. Talus is considering issuing additional shares of stock in order to retire some of its debt. If Talus is currently financed with 50% equity and 50% debt and pays no corporate income taxes, how will this transaction impact Talus weighted average cost of capital (WACC)?

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