Sixx AM Manufacturing has a target debtequity ratio of .45. Its cost of equity is 13 percent, and its cost of debt is 6 percent. If the tax rate is 35 percent, what is the companys WACC?
Sixx AM Manufacturing has a target debt−equity ratio of .45. Its cost of equity is 13 percent, and its cost of debt is 6 percent. If the tax rate is 35 percent, what is the company’s WACC?Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking... Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...
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Fundamentals of corporate finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan