Register
A firm has a total market value of $10 million while its debt has a market value of $4 million. What is the after-tax weighted average cost of capital if the before-tax cost of debt is 10 percent, the
193k views
2 votes
A firm has a total market value of $10 million while its debt has a market value of $4 million. What is the after-tax weighted average cost of capital if the before-tax cost of debt is 10 percent, the cost of equity is 15 percent, and the tax rate is 35 percent?

User Roger Trullo
by
5.7k points

2 Answers

1 vote

Answer:

gbnlpjvcdaaeyjjvhgggyuu

User BurmajaM
by
4.7k points
4 votes

Answer:

the correct answer is 11.6%

Step-by-step explanation:

weighted average cost of capital = 0.4(0.10)(1 - 0.35) + 0.6(0.15) = 11.6%

good luck ❤

User Germanescobar
by
5.5k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.8m questions

7.5m answers

Other Questions

_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
How do i figure out a months ending capital
Which of the following are financial assets traded in money markets? Treasure notes corporate bonds Treasury bills municipal bonds
Link Copied!