Question
Lawler's is considering a new project. The company has a debt-equity ratio of 0.72. The company's cost of equity is 15.1 percent, and the aftertax
Lawler's is considering a new project. The company has a debt-equity ratio of 0.72. The company's cost of equity is 15.1 percent, and the aftertax cost of debt is 7.2 percent. The firm feels that the project is riskier than the company as a whole and that it should use an adjustment factor of +3 percent. What is the WACC it should use for the project?
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Entrepreneurial Finance Venture Capital Deal Structure And Valuation
Authors: Janet Kiholm Smith, Richard L. Smith
2nd Edition
1503603210, 978-1503603219
