Question
Major Marketing has a debt-equity ratio of 0.60, a cost of equity of 11% and cost of debt of 7%. What will the cost of
Major Marketing has a debt-equity ratio of 0.60, a cost of equity of 11% and cost of debt of 7%. What will the cost of equity be if the target capital structure becomes a 50/50 mix of debt and equity?Assume there is no tax and no cost of financial distress and general M&M assumptions apply
How did you get 9.5%?
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
