Glacier Inc. has no long-term debt. Its cost of equity is 19% and there are...
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Glacier Inc. has no long-term debt. Its cost of equity is 19% and there are no taxes. The board of directors decided to change its capital structure such that the debt/equity ratio becomes 1.1. The company can borrow at an interest rate of 9%.
Wacc before reconstructing = 0.19 or 19%
1. What is the new cost of equity?
2. What is the new WACC (without taxes)?
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