Question
Matroyshka, Inc. has a target debt-equity ratio of 1.50. Its WACC is 8 percent, and the take rate is 35 percent. a. If the company's
Matroyshka, Inc. has a target debt-equity ratio of 1.50. Its WACC is 8 percent, and the take rate is 35 percent.
a. If the company's cost of equity is 14 percent, what is its pretax cost of debt?
b. If instead you know that the aftertax cost of debt is 4.1 percent, what is the cost of equity?
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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
