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The Delta Chemical Corporation is expected to have the capital structure for the foreseeable future, as shown in the table below. The floatation costs are
The Delta Chemical Corporation is expected to have the capital structure for the foreseeable future, as shown in the table below.
The floatation costs are already included in each cost component. The marginal income tax rate sub for Delta is expected to remain at in the future.
A Determine the cost of capital
B If the riskfree rate is known to be and the average return on the S&P is about determine the cost of equity with beta based on the capitalasset pricing principle.
C Determine the cost of capital on the basis of the cost of equity obtained in Part B
tabletableSource of AfterTaxFinancingtablePercent of TotalFundsBeforeTax Cost,CostDebtShort Term,Long Term,EquityCommon Stock,
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