Question
If the cost of equity capital is 15% p.a., the market value of equity is $5 million, the company tax rate is 30%, the cost
If the cost of equity capital is 15% p.a., the market value of equity is $5 million, the company tax rate is 30%, the cost of debt is 12% p.a. and y = 0.60, what is the cost of capital?
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To calculate the cost of capital we need to consider the weighted average cost of capital WACC which ...
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Equity Asset Valuation
Authors: Jerald E Pinto, CFA Institute
3rd Edition
1119850517, 978-1119850519
