Question
Find the pre-tax weighted average cost of capital where the per share price of equity is $30.0 and the expected return on equity is 15.5%
Find the pre-tax weighted average cost of capital where the per share price of equity is $30.0 and the expected return on equity is 15.5% - there are 37000000 shares outstanding. There is $60M of debt which pays a coupon rate of 9.0% and matures in 10 year. The firm's tax rate is 45%. (Please show equation to get the answer below.)
Answer: 0.1517
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
14th Edition
0357516664, 978-0357516669
