Calculate the new WACC for a firm that changes its capital structure from no debt to a capital structure of 50% debt and 50% equity. Ignore distress costs. Cost of equity with no debt: 7.00% Cost of debt 4% Tax Rate 30%

Calculate the new WACC for a firm that changes its capital structure from no debt to a capital structure of 50% debt and 50% equity. Ignore distress costs. Cost of equity with no debt: 7.00% Cost of debt 4% Tax Rate 30%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter13: Capital Structure Concepts

Section: Chapter Questions

Problem 1P

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