February 20th, 2020
A firm starts with all equity financing and a cost of equity of 13%. Suppose it refinances to the following market value capital structure: Debt is 40% and Equity is 60%.The rate paid on debt is 10% and there are no taxes.
1. After the refinancing, what is the firm cost of capital
2. After the refinancing, what is the firm cost on equity. Get Finance homework help today