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answer: 19.6% please show workings TG is a privately owned company that provides package holidays. It has a gearing ratio of 40 per cent debt
answer: 19.6%
please show workings
TG is a privately owned company that provides package holidays. It has a gearing ratio of 40 per cent debt finance to 60 per cent equity finance by market value. RS is a listed company that provides package holidays. It has no debt finance. Its beta factor is 1.20. The risk-free rate of return is 3 per cent and the market return is 12 per cent. Corporate tax is 20 per cent. All debt is risk free. What is a suitable discount rate to apply to a valuation exercise for TGStep by Step Solution
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