Question
Aero Berhad is an unlevered company and valued at $640,000. Aero currently decided to include debt in its capital structure. The current cost of equity
Aero Berhad is an unlevered company and valued at $640,000. Aero currently decided to
include debt in its capital structure. The current cost of equity is 12 percent and the interest
rate is 8 percent. There are currently 32,000 shares outstanding and its effective marginal tax
bracket is 30 percent.
Calculate the
Weighted Average Cost of Capital (WACC)
of the levered firm with tax.
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Bond Markets Analysis and Strategies
Authors: Frank J.Fabozzi
9th edition
133796779, 978-0133796773
