Question
10. ABC has a target debt-to-equity ratio of 1.50 and a WACC of 12%. The corporate tax rate is 40% and the firm's cost of
10. ABC has a target debt-to-equity ratio of 1.50 and a WACC of 12%. The corporate tax rate is 40% and the firm's cost of equity is 18%. What is ABC's pre-tax cost of debt? 10.0% b) 13.3% 15.0% 16.0% 16.7%
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
14th edition
133879879, 978-0133879872
