Question
ABC companys equity beta is 1.2. The market risk premium is 7% and the risk-free rate is 10%. The company has a debt-equity ratio is
ABC companys equity beta is 1.2. The market risk premium is 7% and the risk-free rate is 10%. The company has a debt-equity ratio is 2:3. Its pre- tax cost of debt is 14%. If the tax rate is 35%, what is the cost of capital?
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, William J. Kretlow
11th Edition
0324653506, 978-0324653502
