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    Leverage and Capital Structure

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    Triangle Enterprises has no debt but can borrow at 9 percent. The firm's WACC is currently 14.7 percent and there is no corporate tax. If the firm converts to 70 percent debt, what will its cost of equity be?

    a) 20.67 percent
    b) 22.95 percent
    c) 24.47 percent
    d) 26.39 percent
    e) 28.00 percent

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    The cost of Equity will be given by formula...

    New cost of ...

    Solution Summary

    The solution cost of equity when a comany becomes leveraged.