ABC Corporation has total fixed assets of MYR 125 million, of which MYR 58 million are financed by debt The corporate tax rate is 31 ABC is considering an expansion to its existing business line, which would require a capital injection of MYR 46 million ABC is happy with its capital structure and would therefore raise this capital injection using the same proportions of debt and equity currently in its balance sheet ABC's bonds are priced to yield 12 79 and the consensus among security analysts who follow ABC is that its stock should deliver an annual return of 22 45 over the next 5 years What discount rate should ABC use to value this project Report your answer as a percentage with 2 digit precision (ex show 12 3456 as 12 35)

Question

ABC Corporation has total fixed assets of MYR 125 million, of which MYR 58 million are financed by debt  The corporate tax rate is 31   ABC is considering an expansion to its existing business line, which would require a capital injection of MYR 46 million  ABC is happy with its capital structure and would therefore raise this capital injection using the same proportions of debt and equity currently in its balance sheet  ABC's bonds are priced to yield 12 79  and the consensus among security analysts who follow ABC is that its stock should deliver an annual return of 22 45  over the next 5 years  What discount rate should ABC use to value this project  Report your answer as a percentage with 2 digit precision (ex  show 12 3456  as 12 35)

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Question

ABC Corporation has total fixed assets of MYR 125 million, of which MYR 58 million are financed by debt. The corporate tax rate is 31%.

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