Problem 16 19 Leverage and the Cost of Capital (LO2) Dusit is financed 32 by debt yielding 8 2 Investors require a return of 15 2 on Dusits equity What is the companys weighted average cost of capital if the corporate tax rate is 21 What would be the companys cost of capital if it were exempted from corporate tax

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Problem 16-19 Leverage and the Cost of Capital (LO2) Dusit is financed 32% by debt yielding 8.2%. Investors require a return of 15.2% on Dusits

Problem 16-19 Leverage and the Cost of Capital (LO2)

Dusit is financed 32% by debt yielding 8.2%. Investors require a return of 15.2% on Dusits equity.

What is the companys weighted-average cost of capital if the corporate tax rate is 21%?
What would be the companys cost of capital if it were exempted from corporate tax?

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