Question
Unida Systems has 47 million shares outstanding trading for $11 per share. In addition, Unida has $114 million in outstanding debt. Suppose Unida's equity cost
Unida Systems has 47 million shares outstanding trading for $11 per share. In addition, Unida has $114 million in outstanding debt. Suppose Unida's equity cost of capital is 16%, its debt cost of capital is 9%, and the corporate tax rate is 38%.
ROUND TO ONE DECIMAL PLACE
a. What is Unida's unlevered cost of capital?
b. What is Unida's after-tax debt cost of capital?
c. What is Unida's weighted average cost of capital?
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Handbook Of Business Valuation
Authors: Thomas L. West, Jeffrey D. Jones
2nd Edition
0471297879, 978-0471297871
