Question
A firm's unlevered cost of capital is 12%. The firm has a market value of equity of $14 million and $5 million in outstanding debt
A firm's unlevered cost of capital is 12%. The firm has a market value of equity of $14 million and $5 million in outstanding debt at an interest rate of 4%. The corporate tax rate is 30%. What is the firm's cost of equity?
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Public Finance A Contemporary Application of Theory to Policy
Authors: David N Hyman
11th edition
9781305474253, 1285173953, 1305474252, 978-1285173955
