Question
In: Finance
Legacy Co. has no debt but can borrow at 7%. The firm’s WACC is currently 11%,...
Legacy Co. has no debt but can borrow at 7%. The firm’s WACC is currently 11%, and the tax rate is 35%.
a. What is Legacy Co.'s cost of equity?
b. If the firm converts to 25% debt, what will its cost of equity be?
c. If the firm converts to 50% debt, what will its cost of equity be?
d. What is Legacy Co.'s WAACC in part (b)? In part (c)?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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rounded to 2 decimal places, e.g., 32.16.)
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If the firm converts to 15 percent debt, what will its cost of
equity be? (Do not round intermediate calculations and
enter your answer as a percent...
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