Question
A company is 46% financed by risk free debt. The interest rate is 11%, the expected market risk premium is 9%, and the beta of
A company is 46% financed by risk free debt. The interest rate is 11%, the expected market risk premium is 9%, and the beta of the company's common stock is 0.56.
a. What is the company cost of capital?
b. What is the after tax WACC, assuming that the company pays tax at a 40% rate?
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The Principals Guide To School Budgeting
Authors: Richard D. Sorenson, Lloyd M. Goldsmith
3rd Edition
1506389457, 978-1506389455
