Question
A firm is fully equity (100% equity) financed with a cost of equity of 9%. The risk-free rate is 2%, the market risk premium is
A firm is fully equity (100% equity) financed with a cost of equity of 9%. The risk-free rate is 2%, the market risk premium is 7% and the cost of debt is 6%. The firms corporate tax rate is 20%. Whats the firms WACC?
8%
2%
6%
9%
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International Financial Management
Authors: Jeff Madura
7th Edition
0324071744, 978-0324071740
