A company financed completely with equity currently has a cost of capital equal to 8%...
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A company financed completely with equity currently has a cost of capital equal to 8% and a cost of debt of 5%. If M&M Proposition 2 holds and the company plans to change its capital structure to 40% debt and the rest equity, what will be the cost of equity after the change? Express answer as a decimal to 4 places, for example, if your answer is 0.1234, type 0.1234, not 12.34. Please don't give long explanations, I really need the answer in 15 minutes. thank you
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