Question
Johnston Company has a 7% cost of debt, a 50% debt ratio, and a 15% cost of equity. The marginal tax rate is 25%. What
Johnston Company has a 7% cost of debt, a 50% debt ratio, and a 15% cost of equity. The marginal tax rate is 25%. What is Johnston's WACC if it were 100% equity financed? What is Johnstons new WACC if its capital structure changes to 40% debt and the required rate of return on debt goes up to 8%?
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Cases In Healthcare Finance
Authors: George H. Pink, Paula H. Song
7th Edition
1640553177, 978-1640553170
