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What is your cost of debt? Company A has the following: Debt 5,435,000 Equity 6,750,000 (Your student Interest expense number) Tax rate 21% Risk free

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What is your cost of debt?

Company A has the following: Debt 5,435,000 Equity 6,750,000 (Your student Interest expense number) Tax rate 21% Risk free rate 2% Beta 1.50 Market return 10.5% Expected 6.5% growth EBITDA year 0 50,000 D&A year 0 4,000 1,000 (- inflation Working capital (8.6%) yoy) 4,000 (+inflation Capex (8.6%) yoy) Perpetual 4% growth rate Company A has the following: Debt 5,435,000 Equity 6,750,000 (Your student Interest expense number) Tax rate 21% Risk free rate 2% Beta 1.50 Market return 10.5% Expected 6.5% growth EBITDA year 0 50,000 D&A year 0 4,000 1,000 (- inflation Working capital (8.6%) yoy) 4,000 (+inflation Capex (8.6%) yoy) Perpetual 4% growth rate

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