You purchase a small business that is valued at 188447 you, Ask an Expert

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You purchase a small business that is valued at $188447. You decide to borrow $62916 at 8% interest and pay for the rest with equity. The debt is due in one year, and you expect the firm to have cash flows of $67332 in one year. Your firm is risky, so its unlevered cost of equity is 4 percentage points above its cost of debt. What is the cost of equity of the levered firm?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92759500

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