Mitra Corp. is currently all equity financed and has a value of $70 million. Investors...
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Mitra Corp. is currently all equity financed and has a value of $70 million. Investors currently require a return of 15.5% on common stock. Mitra pays no taxes. Mitra plans to issue $20 million of debt with a return of 8 percent and use the proceeds to repurchase common stock. What will be the expected return on the common stock after the proposed debt issue? 13.63% 17.00% SP 17.38% 18.00%
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