Question
1. Coe Corp. has a cost of equity of 14%, and an after-tax cost of debt of 10%. Using market values Cos debt is 40%
1. Coe Corp. has a cost of equity of 14%, and an after-tax cost of debt of 10%. Using market values Cos debt is 40% of the value of the firm and Cos equity is 60% of the value of the firm. What is Coe Corp. weighted average cost of capital?
2. Doe Corp. can borrow at 12% and is has a 35% marginal tax rate. What is Does after-tax cost of debt?
3. Foe Corporation has a beta of 1.2, the risk-free rate is expected to be 4.0% and the market risk premium is expected to be 6%. Using the Capital Asset Pricing Model, what is Foes after-tax cost of equity?
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A Modern Credit Rating Agency The Story Of Moodys
Authors: Daniel Cash
1st Edition
0367427443, 978-0367427443
