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As CEO, you are considering a change in your company's capital structure. The CFO believes the company should increase the debt ratio (D/E) to 1.5.
As CEO, you are considering a change in your company's capital structure. The CFO believes the company should increase the debt ratio (D/E) to 1.5.
| Actual | wd | 25% | Tax rate | 25% |
| Structure | Ws | 75% | ||
| Cost of equity | 14,4% | |||
| Other | radio frequency | 5% | Tax rate | 25% |
| factors | Market risk premium | 9,8% |
What is the estimated cost of capital of the target capital structure with an average default spread of 170 bps?
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To calculate the estimated cost of capital WACC for the target capital structure with an average def...
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
9th Edition
1337614689, 1337614688, 9781337668262, 978-1337614689
