What is gollums new cost of equity


Assignment:

M&M. Gollum Ltd has no debt. Its cost of capital is 9.5%. Suppose Gollum converts to a debt-equity ratio of 1.0. The interest rate on the debt is 7.2%. Ignoring taxes, what is Gollum's new cost of equity? What is its new WACC?

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Financial Management: What is gollums new cost of equity
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