Company A is financed by 23% of debt and the rest of the company is financed by common equity. The company’s before-tax
Posted: Wed May 18, 2022 11:00 pm
Company A is financed by 23% of debt and the rest of the company
is financed by common equity. The company’s before-tax cost of debt
is 4.9%, and its cost of equity is 10.0%. If the marginal tax rate
is 30%, the company’s weighted average cost of capital (WACC) is
_____. (Note: Round your answer to three decimal
places. For example, if your answer is 8.7%, you should write 0.087
in the answer box. DO NOT write your answers as percentages as you
will be marked wrong.)
is financed by common equity. The company’s before-tax cost of debt
is 4.9%, and its cost of equity is 10.0%. If the marginal tax rate
is 30%, the company’s weighted average cost of capital (WACC) is
_____. (Note: Round your answer to three decimal
places. For example, if your answer is 8.7%, you should write 0.087
in the answer box. DO NOT write your answers as percentages as you
will be marked wrong.)