Question
A company is 30% financed by risk-free debt. The interest rate is 8%, the expected market risk premium is 6%, and the beta of the
A company is 30% financed by risk-free debt. The interest rate is 8%, the expected market risk premium is 6%, and the beta of the companys common stock is 0.69.
a. What is the company cost of capital?
b. What is the after-tax WACC, assuming that the company pays tax at a 30% rate?
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Personal Finance For Musicians
Authors: Bobby Borg
1st Edition
1538163306, 978-1538163306
