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You have the following information about bank XYZ (in millions): Marginal total cost is 3% Shareholders require a 3% ROA Tax rate is 15%
You have the following information about bank XYZ (in millions): Marginal total cost is 3% Shareholders require a 3% ROA Tax rate is 15% Equity is $50m Assets are $500m, of which $400 earning assets Assume the bank cannot change its capital ratio. Compute the weighted average cost of capital (marginal costing). Write your answer expressed as a %, and round to two decimals. For instance, if you think the cost is 0.0856237, then you write 8.56 below.
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