Question
The Backwoods Lumber Co. has a debt-equity ratio of 0.8. The firm's required return on assets is 12% and its cost of equity is 17%.
The Backwoods Lumber Co. has a debt-equity ratio of 0.8. The firm's required return on assets is 12% and its cost of equity is 17%.
What is the pre-tax cost of debt based on MM Proposition II with no taxes?
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Principles Of Corporate Finance
Authors: Lawrence J. Gitman, Sean M. Hennessey
2nd Canadian Edition
0321452933, 978-0321452931
