Co is plastic toy manufacturer whose debt to equity ratio is 3:2. The corporate debt.

which is assumed to be risk free, has a gross redemption vield of 12%. The beta value of

RI

company's equity is 1.3. The average return on the stock market is 18%. The corporate

tax rate is 30%.

Rpm

The company is considering acquiring a bicycle manufacturing project. B Company is a

bicycle manufacturing company with equity beta of 1.7 and equity and debt ratio 2:1. A

Co wants to maintain its existing capital structure after the implementation of new

project. What is suitable weighted average cost of capital to apply to project?

Que 2, CLO - 2) a) Co is plastic toy manufacturer whose debt to equity ratio is 3:2. The corporate debt. which is assumed to be risk free, has a gross redemption yield of 12%. The beta value of 2 company's equity is 1.3. The average return on the stock market is 18%. The corporate tax rate is 30%. The company is considering acquiring a bicycle manufacturing project. B Company is a bicycle manufacturing company with equity beta of 1.7 and equity and debt ratio 2:1. A Co wants to maintain its existing capital structure after the implementation of new project. What is suitable weighted average cost of capital to apply to project