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Business, 23.02.2021 01:10 fredo99

Day Medical Supply is trying to establish its optimal capital structure. Day's current beta is 1.5. Its current capital structure consists of 25% debt and 75% equity; however, the CEO believes the firm should use more debt. The risk-free rate, rf, is 5%, the market risk premium, RPM, is 6%, and the firm's tax rate is 40%. What would be Day's estimated cost of equity if it changed its capital structure to 50% debt and 50% equity

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Day Medical Supply is trying to establish its optimal capital structure. Day's current beta is 1.5....
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