Question
M&M, Inc., has a debt-equity ratio of 2. The firms weighted average cost of capital is 9%, and its pretax cost of debt is 5%.
M&M, Inc., has a debt-equity ratio of 2. The firms weighted average cost of capital is 9%, and its pretax cost of debt is 5%. The corporate tax rate is 25%.
a) What is the companys cost of equity?
b) What is the companys unlevered cost of equity?
c) What would the companys weighted average cost of capital be if the firms debt-equity ratio were 1?
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The Everything Guide To Day Trading
Authors: David Borman
1st Edition
1440506213, 978-1440506215
