For each situation, calculate the WACC: a. Risk-free rate is 5 percent, expected market return is 11

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For each situation, calculate the WACC:

a. Risk-free rate is 5 percent, expected market return is 11 percent, \(\beta\) is 0.75 , after-tax cost of debt capital is 5 percent, split between debt/equity capital is \(60 / 40\)

b. Risk-free rate is 5 percent, expected market return is 11 percent, \(\beta\) is 0.90 , after-tax cost of debt capital is 4 percent, split between debt/equity capital is 50/50

c. Risk-free rate is 5 percent, expected market return is 11 percent, \(\beta\) is 1.20 , after-tax cost of debt capital is 6 percent, split between debt/equity capital is \(20 / 80\)

d. Risk-free rate is 5 percent, expected market return is 11 percent, \(\beta\) is 0.00 , after-tax cost of debt capital is 6 percent, split between debt/equity capital is \(80 / 20\)

e. Risk-free rate is 5 percent, expected market return is 11 percent, \(\beta\) is 1.00 , after-tax cost of debt capital is 5 percent, split between debt/equity capital is \(60 / 40\)

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Principles Of Engineering Economic Analysis

ISBN: 9781118163832

6th Edition

Authors: John A. White, Kenneth E. Case, David B. Pratt

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