Question
2. Bien has a stock market value of $1 billion. It has long term debt of $500 million outstanding at the borrowing cost of 7%.
2. Bien has a stock market value of $1 billion. It has long term debt of $500 million outstanding at the borrowing cost of 7%. Its stock has a beta of 1.2 and the market return is 10% with a risk free rate of 4%. Its tax rate is 35%.
- What's company cost of equity?
- What's company after tax cost of debt?
- What's the company's WACC?
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International Financial Reporting Standards An Introduction
Authors: Belverd E. Needles, Marian Powers
3rd Edition
1133187943, 978-1133187943
