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What is remotes cost of equity if remote converts to 50 per


Remote Removals Ltd has no debt and its WACC is currently 12 per cent. Remote can borrow at 8 per cent. The corporate tax rate is 30 per cent.

a. What is Remote's cost of equity?

b. If Remote converts to 20 per cent debt, what will its cost of equity be?

c. If Remote converts to 50 per cent debt, what will its cost of equity be?

d. What is Remote's WACC in part (b)? In part (c)?

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