Saskton Corp. is an all-equity-financed firm with a value of $22 million. The cost of equity is
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Question:
The cost of equity is 15%.
It plans to issue $8 million debt at an interest rate of 8% to repurchase some shares.
Saskton is in the 45% tax bracket.
What will be Saskton's weighted average cost of capital after the debt has been issued?
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
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