Question
5) A firm has a target capital structure that consists of 60% of retained earnings and the rest in debt. The firm's cost of retained
5)
A firm has a target capital structure that consists of 60% of retained earnings and the rest in debt. The firm's cost of retained earnings is8.3%. The firm's cost of new debt is similar to the yield to maturity of its existing bonds, which is 6.1%. The firm's tax rate is 25%. Given this information, and given that the firm has no preferred stock, what is the WACC
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The Oxford Handbook Of Quantitative Asset Management
Authors: Bernd Scherer, Kenneth Winston
1st Edition
0199553432, 978-0199553433
