The Rusonette Co. has expected EBIT of $30 in perpetuity, and unlevered cost of capital of...
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The Rusonette Co. has expected EBIT of $30 in perpetuity, and unlevered cost of capital of 12%. Penn will raise debt with market value of $50 and interest of 8%. The firm will repurchase it equity using the proceeds from newly issued debt. The tax rate is 33% Please, assume the economy with no bankruptcy and no financial distress. What is the firm's cost of Equity after the recapitalization? 12.6% 13.0% 12.4% 12.8% 13.2% The Rusonette Co. has expected EBIT of $30 in perpetuity, and unlevered cost of capital of 12%. Penn will raise debt with market value of $50 and interest of 8%. The firm will repurchase it equity using the proceeds from newly issued debt. The tax rate is 33% Please, assume the economy with no bankruptcy and no financial distress. What is the firm's cost of Equity after the recapitalization? 12.6% 13.0% 12.4% 12.8% 13.2%
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