Solution-What is shadow cost of equity

What is shadow cost of equity

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Reference no: EM131026091

Shadow corp. has no debt but can borrow at 8%. the firm's WACC is currently 11% and the tax rate is 35%.

i. What is shadow's cost of equity?

ii. If the firm converts to 25% debt, what will its cost of equity be?

iii. If the firm converts to 50% debt what will its cost of equity be?

iv. What is shadow's WACC in part (b)? in part (c)?

Reference no: EM131026091

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What is shadow cost of equity

Reference no: EM131026091

Reference no: EM131026091

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