Question
LC Corporation Ltd manufactures very healthy diet food packages. LCs debt/equity ratio is 1.5. Its WACC is 9.5 per cent, and its tax rate is
LC Corporation Ltd manufactures very healthy diet food packages. LCs debt/equity ratio is 1.5. Its WACC is 9.5 per cent, and its tax rate is 30 per cent.
Assuming that LCs cost of equity is 16 per cent, what is its pre-tax cost of debt?
Assuming that LCs can sell debt with an interest rate of 7 per cent, what is its cost of equity?
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Fundamentals Of Healthcare Finance
Authors: Paula H. Song, Kristin L. Reiter
4th Edition
1640553223, 978-1640553224
