Question
You know that the target D/E ratio for your firm is 0.80, and the tax rate is 40%. Further, the risk free rate is 4.00%,
You know that the target D/E ratio for your firm is 0.80, and the tax rate is 40%. Further,
the risk free rate is 4.00%, and the expected return on the market is 11.00%. What is the
estimated cost of equity capital? [When aggregating the data, use the equally-weighted average of
the peer firms].
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International Management Managing Across Borders And Cultures
Authors: Helen Deresky
10th Global Edition
1292430362, 978-1292430362
