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Topstone Industries has an expected EBIT of $1,000,000. Its unlevered cost of capital is 15% and its cost of debt is 8%. Topstone's debt-to-equity ratio
"Topstone Industries has an expected EBIT of $1,000,000. Its unlevered cost of capital is 15% and its cost of debt is 8%. Topstone's debt-to-equity ratio is 0.3. The corporate tax rate is 40%. What is the appropriate discount rate to be used under the FTE method to value Topstone?"
13.6% | ||
11.0% | ||
10.0% | ||
16.3% | ||
12.5% |
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