Bruce amp co expects its ebit to be 75000 every year, Ask an Expert

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Bruce & Co. expects its EBIT to be $75,000 every year forever. The company can borrow at 12 percent. The company currently has no debt, its cost of equity is 15 percent, and the tax rate is 35 percent. The company borrows $152,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91789049

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