Question
Sockett Company has a debt equity ratio of .35. It's cost of debt is 7% before tax and their cost of equity has been calculated
Sockett Company has a debt equity ratio of .35. It's cost of debt is 7% before tax and their cost of equity has been calculated using bot the DGM and the CAPM. DGM resulted in a cost of equity of 11.5% and the CAPM resulted in a cost of equity of 12.5%. The tax rate is 30% What is Sockett's WACC? Show all calculations.
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
10th Edition
538482109, 1133711774, 538482389, 9780538482103, 9781133711773, 978-0538482387
