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QUESTION
ABC Company has a cost of equity of 10%. EBIT is 100. They currently have no debt. Find the new cost of equity if they changed to using a capital...
ABC Company has a cost of equity of 10%. EBIT is 100. They currently have no debt. Find the new cost of equity if they changed to using a capital structure that used 40% debt and 60% equity. The interest rate on the debt is 4% and the tax rate is 35%.
