Hawaiian Macadamia Nuts currently has no debt. They are considering changing to a capital structure of 0.8 debt on which they would pay 6% interest. If their current cost of equity is 12%, what will their new cost of equity be assuming a tax rate of 40%. Enter your answer in decimal notation (14,26% would be 14.26).

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Hawaiian Macadamia Nuts currently has no debt. They are considering changing to a capital structure of 0,8 debt on which they would pay 6% interest. If their
current cost of equity is 12%, what will their new cost of equity be assuming a tax rate of 40%
Enter your answer in decimal notation (14,26% would be 14.26)
Transcribed Image Text:Hawaiian Macadamia Nuts currently has no debt. They are considering changing to a capital structure of 0,8 debt on which they would pay 6% interest. If their current cost of equity is 12%, what will their new cost of equity be assuming a tax rate of 40% Enter your answer in decimal notation (14,26% would be 14.26)
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