Question
Winter's Toyland has a target capital structure of 80 percent equity and 20 percent debt. Its WACC is 8.4 percent, and its cost of debt
Winter's Toyland has a target capital structure of 80 percent equity and 20 percent debt. Its WACC is 8.4 percent, and its cost of debt is 5.9 percent. The corporate tax rate is 35 percent. Consider taxes.
What is the company's cost of equity capital?
(Choose the correct one)
8.32%
10.2%
9.54%
11.44%
10.67%
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Financial Modeling
Authors: Simon Benninga
4th Edition
0262027283, 9780262027281
