Bruce amp co expects its ebit to be 89000 every year, Ask an Expert

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Bruce & Co. expects its EBIT to be $89,000 every year forever. The company can borrow at 5 percent. The company currently has no debt, its cost of equity is 8 percent, and the tax rate is 35 percent. The company borrows $102,000 and uses the proceeds to repurchase shares.

What is the cost of equity after recapitalization?

What is the company's WACC?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91792701

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