Question
Danaher Corporation's debt value is $200,000 and its yield is 9%. The firm's equity has a market value of $300,000, its earnings are growing at
Danaher Corporation's debt value is $200,000 and its yield is 9%. The firm's equity has a market value of $300,000, its earnings are growing at a rate of 5%, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12%. What is Danaher's cost of equity?
| A. | 13.20% | |
| B. | 12.60% | |
| C. | 11.40% | |
| D. | 12.00% | |
| E. | 14.00% |
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Personal Finance
Authors: Elizabeth B. Goldsmith
1st Edition
0534544959, 9780534544959
