Morales Publishing's tax rate is 40%, its beta is 1.20, and it uses no debt. However, the CFO is considering
moving to a capital structure with 30% debt and 70% equity. If the risk-free rate is 4.0% and the market risk premium is 6.0%, by how much is the firms cost of equity before and after capital structure change respectively?
cost of equity before capital structure... View the full answer