Kunitz co has no debt its cost of capital is 97 percent, Ask an Expert

Finance

Kunitz Co. has no debt. Its cost of capital is 9.7 percent. Suppose Kunitz converts to a debt-equity ratio of 1. The interest rate on the debt is 6.8 percent. Ignore taxes for this problem.

Requirement 1:

What is the company’s new cost of equity? (Do not round intermediate calculations. Enter youd answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Cost of equity %

Requirement 2:

What is its new WACC? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

WACC %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91826008

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