Question
You are given the following information about a firm and the equity-debt structure of this firm: i) The asset cost of capital is 10%. ii)
You are given the following information about a firm and the equity-debt structure of this firm: i) The asset cost of capital is 10%.
ii) The debt cost of capital is 6%.
iii) The amount of debt is 1000.
iv) The beta of equity is 0.8.
v) The market risk premium is 9%.
vi) The annual effective risk-free rate is 4%.
Calculate the value of the firm
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Get StartedRecommended Textbook for
Financial Management For Decision Makers
Authors: Peter Atrill, Paul Hurley
2nd Canadian Edition
138011605, 978-0138011604
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