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6. (10 points) The valuation of DongHwa Co. includes a $40 million market value for its ordinary shares and a $60 million market value
6. (10 points) The valuation of DongHwa Co. includes a $40 million market value for its ordinary shares and a $60 million market value for its risk-free debt. The beta for the company's shares is 0.8, with the market risk premium anticipated to be 10%. Given a 6% Treasury bill rate, what would be the overall cost of capital for the company, considering a corporate tax rate of 30%?
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Principles of managerial finance
Authors: Lawrence J Gitman, Chad J Zutter
12th edition
9780321524133, 132479540, 321524136, 978-0132479547
