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Business, 05.09.2021 15:50 Giabear23

Shayan Industrial Corporation (SIC) is considering a large-scale recapitalization. Currently, SIC is financed with 25% debt and 75% equity. SIC is considering increasing its level of debt until it is financed with 60% debt and 40% equity. The beta on its common stock at the current level of debt is 1.5, the risk-free rate is 6%, the market risk premium is 4%, and SIC faces a 40% federal-plus-state tax rate. a. What is SIC’s current cost of equity?

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Shayan Industrial Corporation (SIC) is considering a large-scale recapitalization. Currently, SIC is...
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