Question
Safe Airline has a capital structure that consists of 30% debt and 70% equity. The companys cost of debt is 7%. The company has a
Safe Airline has a capital structure that consists of 30% debt and 70% equity. The companys cost of debt is 7%. The company has a beta of 1.2. The risk free rate equals 4.5% and the expected return on the market portfolio is 15%. Assuming no taxes, what is Safe Airlines weighted average cost of capital (Ka)?
| 7% | ||
| 19.22% | ||
| 14.07% | ||
| 17.12% |
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Money Banking And Financial Markets
Authors: Stephen G. Cecchetti
1st Edition
0072452692, 9780072452693
