Question
Given the following information on Cheng Ltd.s capital structure, and assuming the tax rate is 30%, the company's weighted average cost of capital (WACC) will
Given the following information on Cheng Ltd.s capital structure, and assuming the tax rate is 30%, the company's weighted average cost of capital (WACC) will be:
Type of Capital Percent of Capital Structure Before-Tax Cost
Bonds 45% 7%
Preference Shares 15% 12%
Ordinary Shares 40% 14%
| a. | 9.61% | |
| b. | 10.20% | |
| c. | 9.11% | |
| d. | 9.85% |
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International Financial Management
Authors: Jeff Madura
7th Edition
0324071744, 978-0324071740
