Firms Refinancing Assignment | Homework For You
February 13th, 2020
A firm starts life 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 refinancing, what is the firm cost of capital?
2. After refinancing what is the firm cost of equity?Get Finance homework help today