Word Count : 182

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Cost of equity after the change (Gordon growth) is $k_e=\dfrac{D_1}{P_0}+g=\dfrac{3.60}{24}+g=0.15+g$ (i.e. 15% plus the unchanged growth rate $g$). Cost of new debt (debentures) $k_d=13\%$. The new market values (post-issue) are required to compute weights. If $E$ = market value of equity (after share price falls _____ ____ _______ ____ _____ ____ _____ ______ _________ ___.
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