Question
3.- Ikibana restaurants, Inc., has a target debtequity ratio of 55%. Its WACC is 15 percent, and the tax rate is 25 percent. a)If the
3.- Ikibana restaurants, Inc., has a target debtequity ratio of 55%. Its WACC is 15 percent, and the tax rate is 25 percent.
a)If the cost of equity is 20 percent, what is its pretax cost of debt?
b) If instead you know that the aftertax cost of debt is 10 percent, what is the cost of equity?
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Single Stock Futures
Authors: Patrick Lafferty
1st Edition
007159003X, 978-0071590037
