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Company A is financed by 28% of debt and the rest of the company is financed by common equity. The company's before-tax
Posted: Wed May 18, 2022 11:48 pm
by answerhappygod
- Company A Is Financed By 28 Of Debt And The Rest Of The Company Is Financed By Common Equity The Company S Before Tax 1 (31.65 KiB) Viewed 26 times
Company A is financed by 28% of debt and the rest of the
company is financed by common equity. The
company's before-tax cost of debt is 3.7%. Currently the risk-free rate is 14%, the market risk premium is 6% and the stock has a beta of 1.7. 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.)