Your firm is financed 100% with equity and has a cost of equity capital of 13%. You are considering your first debt issue, which would change your capital structure to 27% debt and 73% equity. If your cost of debt is 6%, what will be your new cost of equity? Assume no change in your firm's WACC due to the change in capital structures. The new cost of equity is %. (Round to two decimal places.) C

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Your firm is financed 100% with equity and has a cost of equity capital of 13%. You are considering your first debt issue, which would change your capital structure to 27% debt and 73% equity. If
your cost of debt is 6%, what will be your new cost of equity? Assume no change in your firm's WACC due to the change in capital structures.
The new cost of equity is%. (Round to two decimal places.)
……..
Transcribed Image Text:Your firm is financed 100% with equity and has a cost of equity capital of 13%. You are considering your first debt issue, which would change your capital structure to 27% debt and 73% equity. If your cost of debt is 6%, what will be your new cost of equity? Assume no change in your firm's WACC due to the change in capital structures. The new cost of equity is%. (Round to two decimal places.) ……..
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