Question
A company has a capital structure of 50% debt and 50% equity. The YTM on the companys bonds is 8%, and the companys effective tax
A company has a capital structure of 50% debt and 50% equity. The YTM on the companys bonds is 8%, and the companys effective tax rate is 40%. The cost of equity is 13%. What is the companys WACC? Show your work.
I think this is the equation, but don't know the answer:
The Company cost of Equity is: 9.96=.50*RE + .50*.08*(1-.40) RE=
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Principles Of Finance
Authors: Besley, Scott Besley, Eugene F Brigham, Brigham
4th Edition
0324655886, 9780324655889
