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Company A is financed by 30% of debt and the rest of the company is financed by common equity. The company's before-tax
Posted: Wed May 18, 2022 11:47 pm
by answerhappygod
- Company A Is Financed By 30 Of Debt And The Rest Of The Company Is Financed By Common Equity The Company S Before Tax 1 (31.52 KiB) Viewed 23 times
Company A is financed by 30% of debt and the rest of the
company is financed by common equity. The
company's before-tax cost of debt is 4.6%. Currently the risk- free rate is 1.5%, the market risk premium is 6%, and the stock has a beta of 2.1. If
Company A faces a marginal tax rate of 30%, its weighted average cost of capital WACC) should be (Note: Round your answer as decimals with three decimal places. For example, if your answer is 8.7%, you should write 0.087 in the answer box. DO NOT write your answer as percentages as you will be marked wrong.)