Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. oconnell & co. expects its ebit to be $74,000

OConnell & Co. expects its EBIT to be $74,000 every year forever. The firm can...

70.2K

Verified Solution

Question

Accounting

OConnell & Co. expects its EBIT to be $74,000 every year forever. The firm can borrow at 7 percent. OConnell currently has no debt, and its cost of equity is 12 percent and the tax rate is 35 percent. The company borrows $125,000 and uses the proceeds to repurchase shares. What is the cost of equity after recapitalization? Cost of equity %

What is the WACC?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

in the book, Legendre polynomials are obtained to the degree 5. Normalize polynomials P4 and P5...

Advance Math
Q

Your patient Jane Doe weighs 198 lb You have a 1 L bag of saline...

Biology
Q

A building 160 feet tall casts a 90 foot long shadow. If a person looks...

Basic Math
Q

how do I solve this using Excel need to see formula Assumptions Poisson Arrivals Exponential...

Statistics
Q

ssume that a randomly selected subject is given a bone density test Those test scores...

Statistics
Q

Retained Earnings Statement Sumter Pumps Corporation, a manufacturer of industrial pumps, reports the following results...

Accounting
Q

Fall Industries has set the following standards for one unit: Direct material Quantity: 45 yards...

Accounting
Q

Accounting for Plant Assets Basin Corporation had the following transactions related to its delivery truck:...

Accounting
Q

1 3 points On January 1, Year 1, Booker Corporation issued a...

Accounting
Q

On June 20, 2022 Amazon Inc. declared a 20-for-1 stock split. In a statement, the...

Accounting
Q

Calculation of Cost of Goods Sold: Periodic Inventory System Prepare the cost of goods sold...

Accounting
Q

1) A financial institution with a low ROA can achieve a relatively high ROE through:...

Finance