Question
4. (6 marks) Portneuf Industries has a debt/equity ratio of 1.5. Its WACC is 8.4 percent, and its cost of debt is 5.9 percent. The
4. (6 marks) Portneuf Industries has a debt/equity ratio of 1.5. Its WACC is 8.4 percent, and its cost of debt is 5.9 percent. The corporate tax rate is 35 percent. a. What is the companys cost of equity capital? (2 marks) b. What is the companys unlevered cost of equity capital? (2 marks) c. What would the cost of equity be if the debt/equity ratio were 2? (2 marks)
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The Economics Of Money Banking And Finance
Authors: Peter Howells, Keith Bain
4th Edition
0273710397, 978-0273710394
