ABC Corp is currently has a debt-to-enterprise value ratio of 20%. Its current cost of...
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Accounting
ABC Corp is currently has a debt-to-enterprise value ratio of 20%. Its current cost of equity is 12% and its current cost of debt is 4%. The firm wants to permanently change its financing policy to target a debt-to-enterprise value ratio of 32%. The cost of debt associated with this new financing policy will be 5%. Assuming perfect markets, what will ABC's cost of equity be after it implements this new financing policy?
Express your answer in percent and round to two decimals (do not include the %-symbol in your answer). Please show work
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