Let's say the company's capital structure consists of 25% debt and the rest of it is equity.The cost of capital for equi

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

Let's say the company's capital structure consists of 25% debt and the rest of it is equity.The cost of capital for equi

Post by answerhappygod »

Let's say the company's capital structure consists of 25% debt
and the rest of it is equity.The cost of capital for equity is 0.15
and the cost of capital for bonds is 0.04.On the other hand, when
the debt accounted for 50%, the capital cost for equity capital was
0.20.Calculating the cost of capital for the bond when the
liability accounts for 50% of the total assets?
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Top
Post Reply

Return to “Archived Questions & Answers”