Sunshine Corp hired a new CFO and​ changed​ firm's policy from zero leverage to some leverage. They decided to add enough leverage till the firm value increased​ by​ 20%. Assume cashflows are level perpetual. Use​ data​ below: Risk​ Free​ Rate=5% Market​ Return=12% ​Unlevered​ Beta=1.5 Unlevered Cost​ of​ Capital=15.5% ​Find​ Sunshine's WACC with leverage​     Question content area bottom Part 1 S​unshine's WACC with leverge is ?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Sunshine Corp hired a new CFO and​ changed​ firm's policy from zero leverage to some leverage. They decided to add enough leverage till the firm value increased​ by​ 20%. Assume cashflows are level perpetual.

Use​ data​ below:

Risk​ Free​ Rate=5%

Market​ Return=12%

​Unlevered​ Beta=1.5

Unlevered Cost​ of​ Capital=15.5%

​Find​ Sunshine's WACC with leverage​  

 

Question content area bottom

Part 1

S​unshine's WACC with leverge is ?

enter your response here​%  

​(Round

to two

decimals​)

 

Use 99 if the answer is indeterminate

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