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    Cost of equity capital - capital structure change

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    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 ______ .

    9%
    10%
    13%
    14%
    None of the above.

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    https://brainmass.com/business/capital-structure-and-firm-value/cost-of-equity-capital-capital-structure-change-217959

    Solution Summary

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

    $2.19