Calculate the weighted average cost of capital for TT Trane Technologie. For cost of equity, use the

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Calculate the weighted average cost of capital for TT Trane Technologie. For cost of equity, use the average of your dividend growth and CAPM results. Assume that TT has a 25 percent overall tax rate:

Given :

WACC using book value weights for equity and debt = 6.1%

WACC using market value weights for equity and debt = 7.7%

Which WACC result is more relevant? Why?

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Intermediate Financial Management

ISBN: 9780357516669

14th Edition

Authors: Eugene F Brigham, Phillip R Daves

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Posted Date: Apr 04, 2023 02:01 AM

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Calculate the weighted average cost of capital for TT Trane Technologie. For cost of equity, use the

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To determine which WACC result is more relevant we need to understand the difference between using b... View the full answer

Intermediate Financial Management

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