Question
GFD Corp. has a weighted average cost of capital of 9.6 percent. Its cost of equity is 14.5 percent. The debt-equity ratio is 0.70, while
GFD Corp. has a weighted average cost of capital of 9.6 percent. Its cost of equity is 14.5 percent. The debt-equity ratio is 0.70, while the marginal tax rate is 30 percent. What is the firm's cost of debt?
a. 3.18% b. 3.72% c. 4.35% d. 3.59% e. 2.62%
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
8th edition
013342362X, 978-0133423624
