Question
Howard Power and Telecommunications corporation has 3 divisions. The names of these divisions, along with the after-tax cost of capital for each division and the
Howard Power and Telecommunications corporation has 3 divisions. The names of these divisions, along with the after-tax cost of capital for each division and the market value of the assets in each division, are as follows:
| Division Name | Cost of Capital | MV of Assets |
|---|---|---|
| Infrastructure Development | 8.75 | $250,000,000 |
| Power | 7.50 | $325,000,000 |
| Telecommunications | 8.25 | $675,000,000 |
What is the overall after-tax cost of capital for Howard Power and Telecommunications?
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Cases In Financial Management
Authors: I.M. Pandey
3rd Edition
0071333428, 978-0071333429
