Question
Company A has a %21 tax rate . it has issued 20,000 shares of common stock and has equity of 900,000$. In addition the corporation
Company A has a %21 tax rate . it has issued 20,000 shares of common stock and has equity of 900,000$. In addition the corporation has dept at a before tax rate of 5,25% in amounts as shown below on the relevant portion of the balance sheet.Further assumes the copmpanys beta is1.2.10- years us treusiers carry a rate of 0,98, and our analysis estimate a market return of 11.8%
Account payable 20,000
Note Payabale 10,000
Accruals 16,000
Cuurent Portion of long trem debt 27,260
Totatl Current Liabilities 73,260
Long Term Debts 568,334
Total Liabilities 641,594
Calculate the cost of capital using WAAC .Remember to use after tax values .Show your work
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