After capital structure change respectively

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Morales Publishing’s tax rate is 40%, its beta is 1.10, and it uses no debt. However, the CFO is considering moving to a capital structure with 30% debt and 70% equity. If the risk-free rate is 5.0% and the market risk premium is 6.0%, how much is the firm’s cost of equity before and after capital structure change respectively?

Reference no: EM13946803

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