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Following information is available about Riana company: Cost of debt After-tax cost of debt 4.90% Cost of equity Treasury bond rate (risk free rate) 4%
Following information is available about Riana company:
Cost of debt | |
After-tax cost of debt | 4.90% |
Cost of equity | |
Treasury bond rate (risk free rate) | 4% |
Beta | 0.62 |
Risk premium | 8% |
2014 | 2015 | 2016 | 2017 | |
Capital structure | ||||
% net debt | 25.0% | 25.5% | 26.0% | 26.5% |
% equity | 75.0% | 74.5% | 74.0% | 73.5% |
Required
1. Calculate cost of debt (before tax) each of the year from 2014 to 2017
2. Calculate cost of Equity each of the year from 2014 to 2017
3. WACC (Weighted average cost of capital)
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