Question
A company's CFO wants to maintain a target debt-to-equity ratio of 18%. If the WACC is 15%, and the pre-tax cost of debt is 8%,
A company's CFO wants to maintain a target debt-to-equity ratio of 18%. If the WACC is 15%, and the pre-tax cost of debt is 8%, what is the cost of common equity assuming a tax rate of 40%?
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
