Question
DIY Inc. wants to raise $111,791 perpetual debt to invest in a new project. DT Bank offers a subsidized interest rate of 2.3%. DIY's asset
DIY Inc. wants to raise $111,791 perpetual debt to invest in a new project. DT Bank offers a subsidized interest rate of 2.3%. DIY's asset beta and equity beta are 0.85 and 1.13 respectively. Its debt to asset ratio is 0.46 and tax rate is 34%. The market risk premium is 6.6% and risk-free rate is 2.5%. What is the NPV of this financing?
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Financial Management For Public Health And Not For Profit Organizations
Authors: Steven A. Finkler
2nd Edition
0131471988, 978-0131471986
