Question
The following data pertains to Lowell Corp. Assuming that the risk-free rate is 4.2% and the market risk premium is 6.2%, calculate Lowell's weighted-average cost
The following data pertains to Lowell Corp. Assuming that the risk-free rate is 4.2% and the market risk premium is 6.2%, calculate Lowell's weighted-average cost of capital.
| Lowell Corp. |
| Total Assets | $14,680 |
| Interest-Bearing Debt | $ 8,124 |
| Average borrowing rate for debt (Kd) | 10.0% |
| Common Equity: |
|
| Book Value | $ 5,120 |
| Market Value | $25,700 |
| Marginal Income Tax Rate | 21% |
| Market Equity Beta | 1.275 |
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Derivative Products And Pricing The Das Swaps And Financial Derivatives Library
Authors: Satyajit Das
1st Edition
0470821647, 9780470821640
