Question
ABC Corp has a cost of equity of 10%, a cost of debt of 5%, and a tax rate of 30%. The company's capital structure
ABC Corp has a cost of equity of 10%, a cost of debt of 5%, and a tax rate of 30%. The company's capital structure consists of 60% equity and 40% debt. ABC Corp has earnings before interest and taxes (EBIT) of $500,000, and the company has a perpetual life. Calculate the weighted average cost of capital (WACC) for ABC Corp.
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Managerial Accounting
Authors: James Jiambalvo
4th edition
9780470546888, 9780470333341, 470546883, 470333340, 978-0470578797
