Question
A firm uses only debt and equity in its capital structure. The firm's weight of debt is 45%. The firm could issue new bonds at
A firm uses only debt and equity in its capital structure. The firm's weight of debt is 45%. The firm could issue new bonds at a yield to maturity of 10% and the firm has a tax rate of 30%. If the firm's WACC is 12%, what is the firm's cost of equity?
| 16.09% | |
| 15.63% | |
| 15.21% | |
| 14.57% |
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Public Finance In Canada
Authors: Harvey S. Rosen, Wen, Snoddon
4th Canadian Edition
0070071837, 978-0070071834
