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    Figuring the WACC, the unlevered beta & WACC with new capital structure

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    As the Vice President of a Finance company with the following available data:

    Total assets $ 10,000,000.00
    Debt $ 2,500,000.00
    common equity $ 7,500,000.00
    before tax cost of debt 12.00%
    risk-free rate 5.00%
    Market Return 16.00%
    beta at current capital structure 1.20
    Tax Rate 40%

    What is my firms's current Weighted Average Cost of Capital (WACC)?

    What is my firm's unlevered beta?

    If I am considering changing my firm's capital structure to 40% debt and 60% common equity, to make this change, I will issue additional debt and use the proceeds to repurchase common stock. If I do this, the before tax cost of debt will rise to 14%. What would be my firm's WACC if you adopt this new capital structure?

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    https://brainmass.com/business/weighted-average-cost-of-capital/figuring-the-wacc-the-unlevered-beta-wacc-with-new-capital-structure-58813

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