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Leverage and the Cost of Capital: Dusit is financed 30% by debt yielding 8%. Investors require a return of 15% on Dusit's equity. a. What
Leverage and the Cost of Capital:
Dusit is financed 30% by debt yielding 8%. Investors require a return of 15% on Dusit's equity.
a. What is the company's weighted-average cost of capital if the corporate tax is 35%?
b. What would be the company's cost of capital if it were exempted from corporate tax?
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