Gobi Co has irredeemable 4% loan notes in issue with a nominal value of $20m.
Posted: Mon Mar 07, 2022 8:39 am
The current market value of the loan notes is $10 million and the tax rate is 25%. The equity shares of Gobi Co have a total marketcapitalizationof $30 million. The companys weighted average cost of capital is 10%.
What is the cost of equity for Gobi Co?
A. 10.7%
B. 11.3%
C. 12.3%
D. 12.5%
What is the cost of equity for Gobi Co?
A. 10.7%
B. 11.3%
C. 12.3%
D. 12.5%