Question
You work in the capital budgeting project of your firm and you have been asked to convert a real cost of capital of 15% into
You work in the capital budgeting project of your firm and you have been asked to convert a real cost of capital of 15% into a nominal cost of capital. The expected rate of inflation is 2%. What is the nominal cost of capital? Express your cost of capital answer in decimal format and accurate to 4 decimal places (e.g., 0.023450 should be entered as 0.0235).
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
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