Question
An investment banking firm has estimated the following after-tax cost of debt and cost of equity for Odartis Finest Vegas Resorts. Proportion of Debt After-tax
An investment banking firm has estimated the following after-tax cost of debt and cost of equity for Odartis Finest Vegas Resorts.
| Proportion of Debt | After-tax Cost of Debt | Cost of Equity |
| 30% | 6.8% | 13.8 |
| 40% | 7.7% | 14.1% |
| 50% | 8.9% | 14.6% |
What is the cost of capital at Odartis optimal capital structure given the above information?
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International Financial Management
Authors: Jeff Madura
2nd Edition
0314430296, 978-0314430298
