Question
Bermuda Cruises issues only common stocks and coupon bonds. The firm has a debt-equity ratio of 0.45. The cost of equity is 17.6 percent. Required:
Bermuda Cruises issues only common stocks and coupon bonds. The firm has a debt-equity ratio of 0.45. The cost of equity is 17.6 percent.
Required: What is the pre-tax cost of the company debt if weighted average costs of the company is 13.5% and the firm's tax rate is 35 percent?
using this WACC= wD x kD(1-Tc) + wEx kE
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Illustrating Finance Policy With Mathematica
Authors: Nicholas L. Georgakopoulos
1st Edition
3319953710, 978-3319953717
