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can you answer all 3 questions? 1) Carlos Cookie Carrasco is looking to build a winter home on Margarita Island in his native Venezuela. The
can you answer all 3 questions?
1) Carlos "Cookie" Carrasco is looking to build a winter home on Margarita Island in his native Venezuela. The amount of money he will spend is $17mn. He will finance the new home with $14mn in borrowings at 7%, and the remainder with equity. If Mr. Carrasco calculates his weighted average cost of capital (WACC) at 15\%, what would his cost of equity be? a) 10.25% b) 9.24% c) 8.23% d) 7.22% e) 6.21% 2) The Flushing Queens Brewery is 70% funded with debt at an after-tax cost of 9%, while the cost of equity is 12%. What is the Flushing Queens Brewery weighted average cost of capital (WACC)? a) 9.0% b) 12.0% c) 10.5% d) 9.9% e) 0.0% 3) How is the cost of equity calculated? a) Dividend Growth model approach b) Security Market Line approach c) Bloomberg terminal d) a, b, and c e) None of the aboveStep by Step Solution
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