Homework Answers
Hello,
As per the details given in the question
a) Cost of newly issue equity
Ke = 
Ke = 
Ke = 
Ke = 22.044%
b) WACC if firm not issue new equity
WACC - Wd*Kd + Wd*Kp + Wd*Ke
Kd = 8.7%(1-t)
Kd = 8.7%(1-0.4)
Kd = 5.22%
Ke = 20%
Kp = 8.67%
WACC =0.35*5.22 + 0.02*8.67 + .63*.20
WACC =14.6004%
I hope this clear your doubt.
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