Question
A company is 40 % financed by risk free debt. the interest rate is 10 %, the expected market risk premium is 8 %, and
A company is 40 % financed by risk free debt. the interest rate is 10 %, the expected market risk premium is 8 %, and the beta of the company's common stock is 0.5. What is the company cost of capital ? what is the after tax WACC, assuming that the company pays thax at a 35 % rate ?
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How Finance Works
Authors: Mihir Desai
1st Edition
1633696707, 978-1633696709
