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Adidas has $20 million capital, of which, 30% is equity. Shareholders' required rate of return is 12% p.a. Creditors charge a 8% p.a interest. Calculate
Adidas has $20 million capital, of which, 30% is equity. Shareholders' required rate of return is 12% p.a. Creditors charge a 8% p.a interest.
- Calculate Adidas' Weighted Average Cost of Capital. Answer:
- An additional $3 million of equity capital has been raised to invest in a new marketing campaign. Due to increased risk of higher industry competition, shareholders' required rate of return increases by 3% p.a. What is Adidas' new WACC? Answer:
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
5th edition
1111527369, 978-1111527365
