Question
Question 8 Netflix has decided to increase its debt-to-equity ratio from 0% to 20%. As a result, Netlixs equity cost of capital has increased to
Question 8
Netflix has decided to increase its debt-to-equity ratio from 0% to 20%. As a result, Netlixs equity cost of capital has increased to 12%, while its WACC has remained unchanged at 10.5%. Company tax rate is zero. Given this information, what is the implied debt cost of capital
O 3%
O 1%
O 2%
O 4%
O 5%
Question 8
Netflix has decided to increase its debt-to-equity ratio from 0% to 20%. As a result, Netlixs equity cost of capital has increased to 12%, while its WACC has remained unchanged at 10.5%. Company tax rate is zero. Given this information, what is the implied debt cost of capital
O 3%
O 1%
O 2%
O 4%
O 5%
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Pricing And Liquidity Of Complex And Structured Derivatives
Authors: Mathias Schmidt
1st Edition
3319459694, 978-3319459691
