Question
NatNah, a builder of acoustic accessories, has no debt and an equity cost of capital of 12%. Suppose NatNah decides to increase its leverage to
NatNah, a builder of acoustic accessories, has no debt and an equity cost of capital of 12%. Suppose NatNah decides to increase its leverage to maintain a market debt-to-value ratio of 0.5. Suppose its debt cost of capital is 7% and its corporate tax rate is 34%. If NatNah's pre-tax WACC remains constant, what will be its (effective after-tax) WACC with the increase in leverage?
The effective after-tax WACC will be __% (Round to two decimal places.)
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Dave Ramseys Complete Guide To Money
Authors: Dave Ramsey
1st Edition
1937077209, 978-1937077204
