DIY Inc. wants to raise $111,791 perpetual debt to invest in a new project. DT Bank offers a subsidized interest rate of 2.3%. DIY's asset beta and equity beta are 0.85 and 1.13 respectively. Its debt to asset ratio is 0.46 and tax rate is 34%. The market risk premium is 6.6% and risk-free rate is 2.5%. What is the NPV of this financing?

Answer rating: 100% (QA)

Unlevered beta Casset beta 0832 Debt to asset ratio 0... View the full answer