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The unlevered cost of capital of a given firm is given by 20%, while its debt is given by $75,000,000. The pre-tax cost of debt
The unlevered cost of capital of a given firm is given by 20%, while its debt is given by $75,000,000. The pre-tax cost of debt (equal to the risk-free rate) is given by 10%. The levered value of the firm is given by $200,000,000, while its equity value is given by $125,000,000. The tax rate is 20%. The WACC of this firm is given by:
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15.5%
16.5%
17.5%
18.5%
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