Question

Cede & Co. expects its EBIT to be $72938 every year forever. The firm can borrow at 10%. Cede currently has no

debt, and its cost of equity is 24%. The tax rate is 31%.

What is the firm’s cost of equity capital after borrowing $45,000 and using the proceeds to repurchase shares (i.e., after recapitalization)? 

The answer is 26.43 please show all work so I can figure out where I went wrong

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