Question
Torp Industries has a debt-equity ratio of 1.5. Its WACC is 12%, and its cost of debt is 12%. The corporate tax rate is 35%
Torp Industries has a debt-equity ratio of 1.5. Its WACC is 12%, and its cost of debt is 12%. The corporate tax rate is 35%
a.What is Torp's cost of equity capital?
b.What would the cost of equity be if the debt-equity ratio were 2? What if it were 1?
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Forecasting Methods And Applications
Authors: Spyros G. Makridakis, Steven C. Wheelwright, Rob J Hyndman
3rd Edition
0471532339, 9780471532330
