Question
A company stock's beta is estimated to be 0.8 & the market risk premium is 7%. Its capital structure is 30% debt with the rest
A company stock's beta is estimated to be 0.8 & the market risk premium is 7%. Its capital structure is 30% debt with the rest being equity. The interest on debt is 5%. Corporate tax rate is 35% while the T.Bill rate is 4%. Find the company's cost of equity and the Weighted Average Cost of Capital (WACC). (L1)
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Bond Markets Analysis And Strategies
Authors: Frank J.Fabozzi
7th Edition
0136078974, 978-0136078975
