Question
Marigold and Dutch Lady are identical in all expects except their capital structures. Marigold has 10,000 shares outstanding which the share price is currently worth
Marigold and Dutch Lady are identical in all expects except their capital structures. Marigold has 10,000 shares outstanding which the share price is currently worth RM20 per share. The market value of Betas debt is RM50,000 and the cost of debt is 12 percent. Each firm is expected to have earnings before interest and taxes (EBIT) of RM55,000 respectively. Calculate the Weighted Average Cost of Capital (WACC) for Marigold if the cost of equity is stated at 12.5 percent.
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The Handbook Of Structured Finance
Authors: Arnaud De Servigny, Norbert Jobst
1st Edition
0071468641, 978-0071468640
