Question
A company has a WACC of 10%. It can borrow at 4%. Assume that the company has a target capital structure of 60% equity, 40%
A company has a WACC of 10%. It can borrow at 4%. Assume that the company has a target capital structure of 60% equity, 40% debt. The corporate tax rate is 20%. Based on MM Theory with taxes, what is the cost of equity? What is the WACC?
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80 The cost of equity is 80 The cost of equity WACC x 1T 80 10 x 1020 The WACC is the w...
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
11th edition
77861752, 978-0077861759
