Question
WACC Cost of Debt After-tax cost of debt 4.90% Cost of Equity Treasury Bond Rate (risk free rate) 5% Beta 0.48 Risk premium 7% Years
WACC
| Cost of Debt |
|
|
| After-tax cost of debt |
| 4.90% |
| Cost of Equity |
|
| Treasury Bond Rate (risk free rate) | 5% |
| Beta | 0.48 |
| Risk premium | 7% |
| Years | 2014 | 2015 | 2016 | 2017 |
| Capital Structure |
|
|
|
|
| Debt | 22% | 25% | 28% | 27% |
| Equity | 78% | 76% | 72% | 73% |
Please calculate following for each of the year from 2014 to 2017:3
- Cost of Debt (before tax)
- Cost of Equity
- WACC (Weighted Average Cost of Capital)
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Financial Accounting Tools for Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
5th Edition
9781118560952, 1118560957, 978-0470239803
