Question
40% of a URC's funding comes from risk-free debt. The company's common stock has a beta of 0.5, a market risk premium of 8%, and
40% of a URC's funding comes from risk-free debt. The company's common stock has a beta of 0.5, a market risk premium of 8%, and an interest rate of 10%. Suppose the company pays 20% tax on its profits. What is the company's after-tax WACC? Calculate your answer as a percent rounded to 1 decimal place. (Do not round intermediate calculations.)
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Cases In Financial Management
Authors: I.M. Pandey
3rd Edition
0071333428, 978-0071333429
