A firm has zero debt in its capital structure its overall, Ask an Expert

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A firm has zero debt in its capital structure. Its overall cost of capital is 8%. The firm is considering new capital structure with 50% debt (D/E=50%). The interest rate on the debt would be 5%. Assuming that the corporate tax rate is 40%, its cost of equity capital with the new capital structure would be?

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Financial Management, Finance

Category:- Financial Management
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