Company A is financed by 17% of debt and the rest of the company is financed by common equity. The company’s before-tax
Posted: Wed May 18, 2022 11:58 pm
Company A is financed by 17% of debt and the rest of the company
is financed by common equity. The company’s before-tax cost of debt
is 3.8%. Currently the risk-free rate is 1.7%, 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 _____.
is financed by common equity. The company’s before-tax cost of debt
is 3.8%. Currently the risk-free rate is 1.7%, 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 _____.