Explore BrainMass

Explore BrainMass

    Cost of equity capital - capital structure change

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    18. A firm has zero debt in its capital structure. Its overall cost of capital is 10%. The firm is considering a new capital structure with 60% debt. The interest rate on the debt would be 8%. Assuming there are no taxes or other imperfections, its cost of equity capital with the new capital structure would be ______ .

    None of the above.

    © BrainMass Inc. brainmass.com December 15, 2020, 3:47 pm ad1c9bdddf

    Solution Summary

    The solution explains how to calculate the cost of equity after a change in capital structure