An unlevered firm has expected earnings of 3306250 and a, Ask an Expert

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An unlevered firm has expected earnings of $33,062.50 and a market value of equity of $287,500. The firm is planning to issue $50,000 of debt at 7 percent interest and use the proceeds to repurchase shares at their current market value. Ignore taxes. What will be the cost of equity after the repurchase?

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