A company has a capital structure of 70% debt and 30% equity. Annual before tax cost of debt is 12% and tax rate is 30%.Market risk premium is 6% and riskfree rate is 5%.Company shares have a positive...


A company has a capital structure of 70% debt and 30% equity. Annual before tax cost of debt is 12% and tax rate is 30%.Market risk premium is 6% and riskfree rate is 5%.Company shares have a positive correlation with and are 1.25 times more volatile than the market. Please find the weighted average cost of capital for the company?



Jun 09, 2022
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