Question
A firm has a WACC equal to 11.5 percent, the pretax cost of debt is 6.5 percent and the cost of equity is 15 percent.
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A firm has a WACC equal to 11.5 percent, the pretax cost of debt is 6.5 percent and the cost of equity is 15 percent. The tax rate is 35%. Given these figures, what is the firms debt-equity ratio?
a. 0.50
b. 0.72
c. 0.22
d. 0.65
e. 0.48
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Shareholder Empowerment A New Era In Corporate Governance
Authors: Maria Goranova, Lori Verstegen Ryan
1st Edition
1137376449,1137373938
