Land rover corp is currently an all equity firm worth 100m, Ask an Expert

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Land Rover Corp. is currently an all equity firm worth $100M. Land Rover's cost of equity is currently 14% and its tax rate is 30%.

Management is thinking of issuing $20M worth of debt and using all that money to buy back stock. If the cost of debt is 6%.

What will the new weighted average cost of capital be? Assume the cost of equity DOES NOT change.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92805436

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