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A firm has $ 5 4 billion in equity, $ 5 8 billion in debt, and a tax rate of 2 1 % . The

A firm has $ $54$ billion in equity, $ $58$ billion in debt, and a tax rate of $21 % .$ The pre $-$ tax cost of debt and equity are $1.9 % .$ and $9.7 % .,$ respectively. What discount rate should it use for a typical project?

$4 %$

$8 %$

$5 %$

$9 %$

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Question

A firm has $ 5 4 billion in equity, $ 5 8 billion in debt, and a tax rate of 2 1 % . The

A firm has $54 billion in equity, $58 billion in debt, and a tax rate of 21%. The pre-tax cost of debt and equity are 1.9%. and 9.7%., respectively. What discount rate should it use for a typical project? 4% 8% 5% 9%

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A firm has $ $54$ billion in equity, $ $58$ billion in debt, and a tax rate of $21 % .$ The pre $-$ tax cost of debt and equity are $1.9 % .$ and $9.7 % .,$ respectively. What discount rate should it use for a typical project?

$4 %$

$8 %$

$5 %$

$9 %$