07 Oct Bloom Company Limited expects its EBIT to be $100,000 every year forever. The firm can borrow at 9 percent. The fir
Bloom Company Limited expects its EBIT to be $100,000 every year forever. The firm can borrow at 9 percent. The firm currently has no debt, and its cost of equity is 18 percent. The tax rate is 35 percent. The firm will borrow $80,000 and use the proceeds to repurchase shares. What will the WACC be after recapitalization?
