Question
LIS Company has $60 million in long-term debt, $85 million in shareholders equity [both figures are market value basis]. The cost of equity is 13%,
LIS Company has $60 million in long-term debt, $85 million in shareholders equity [both figures are market value basis]. The cost of equity is 13%, cost of long-term debt is 8.5% and the tax rate is 18%. (a) What is the weighted average cost of capital [WACC] for LIS? (b)LIS Company has a pretax income of $13.5 million. What is the value of the company based on calculation (a)
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Public Finance In Canada
Authors: Harvey S. Rosen, Ted Gayer, Jean-Francois Wen, Tracy Snoddon
5th Canadian Edition
1259030776, 978-1259030772
