Question
A firm has $240 billion in debt, $32 billion in equity, and a tax rate of 21%. The pre-tax cost of debt and equity are
A firm has $240 billion in debt, $32 billion in equity, and a tax rate of 21%. The pre-tax cost of debt and equity are 2.1% and 12.0%, respectively. What discount rate should it use for a typical project? A) 2.97% B) 2.88% (ANSWER) C) 8.61% D) 782.16%
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Financial Valuation
Authors: James R. Hitchner
4th Edition
1119286603, 978-1119286608
