Question
36: The after-tax cost of debt of Company XYZ Ltd is 4.5%. the systematic risk of its equity is equal to that of the market.
36:
The after-tax cost of debt of Company XYZ Ltd is 4.5%. the systematic risk of its equity is equal to that of the market. The risk-free interest rate is 5% per annum. Rate of return on market portfolio is 7% (assume franking premium = 0). 35% of the firms funding comes from debt and the rest comes from equity. Compute the cost of capital of this company.
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Options Trading For Beginners How To Generate Predictable Income And Make A Living Without Taking Big Risks Even If You Re A Complete Beginner
Authors: Greg Middleton
1st Edition
979-8866955046
