Question
A firm has a capital structure of 25% debt and 75% equity. The YTM on outstanding debt is 9%, the current return on the market
A firm has a capital structure of 25% debt and 75% equity. The YTM on outstanding debt is 9%, the current return on the market is 12%, the risk-free rate is 8%, the firms beta is 1.5 and the corporate tax rate is 40%. What is the firms after-tax weighted average cost of capital?
| A- | 8.4% | |
| B- | 8.85% | |
| C- | 9.75% | |
| D- | 10% | |
| E- | 11.85% |
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The Venture Capital Investment Process
Authors: Darek Klonowski
1st Edition
0230612881, 023011007X, 9780230612884, 9780230110076
