Question
A firms has a debt-equity ratio of 0.70 and a tax rate of 35 percent. The firm does not issue preferred stock. The cost of
A firms has a debt-equity ratio of 0.70 and a tax rate of 35 percent. The firm does not issue preferred stock. The cost of equity is 14.5 percent and the after-tax cost of debt is 4.8 percent. What is the weighted average cost of capital?
a. 10.50 percent
b. 10.67 percent
c. 11.06 percent
d. 11.38 percent
e. 11.57 percent
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Equity Valuation Risk And Investment A Practitioners Roadmap
Authors: Peter C. Stimes
1st Edition
0470226404, 9780470226407
