Sunshine Corp hired a new CFO and changed firm’s policy from zero leverage to some leverage. They decided to add enough leverage till the firm value increased by 20%. Assume cashflows are level perpetual.
Use data below:
Risk Free Rate=5%
Market Return=12%
Unlevered Beta=1.5
Unlevered Cost of Capital=15.5%
Find Sunshine’s WACC with leverage
Question content area bottom
Part 1
Sunshine's WACC with leverge is enter your response here%
(Round to two decimals)
Use 99 if the answer is indeterminate
