Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 13 1 pts TeleNyckel, Inc. has a bota of 1.8 and is trying to calculate its cost of equity capital of the risk-free rate

image text in transcribed
Question 13 1 pts TeleNyckel, Inc. has a bota of 1.8 and is trying to calculate its cost of equity capital of the risk-free rate of totum is a percent and the market risk premium is 9 percent. then what is the firm's after-tax cost of equity capital if the firm's marginal tax rate is 30 percent? 15.46% 21.20% 19 20% 13,20% Question 14 1 pts Droz's Hiking Gear, Ina, has found that its common equity capital shares have a beta equal to 1.7 while the risk-free retum is 3 percent and the expected return on the market is 8 percent It has 7-year semiannual maturity bonds outstanding with a price of $975 that have a coupon rate of 4 percent. The firm s financed with $140 million of common shares (market value) and $80 milion of debt. What is the after-tax weighted average cost of capital for Droz's, it is subject to a 35 percent marginal Lix rate? Round your final percentage answer to three decimal places 9.9522% 12.266% 5.389 83618%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Corporate Finance

Authors: William L. Megginson, M.D. Lucey Brian C., Scott J. Smart, Scott B. Smart, Bill Megginson

1st Edition

184480562X, 9781844805624

More Books

Students also viewed these Finance questions