A company has a total debt ratio of 40%. The average interests rate on the companys debt

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A company has a total debt ratio of 40%. The average interests rate on the company’s debt is 5% and the market requires a 20% return on the company’s stock. The company’s average tax rate is 25%. What is this company’s cost of capital?

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Essentials of Managerial Finance

ISBN: 978-0324422702

14th edition

Authors: Scott Besley, Eugene F. Brigham

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Posted Date: Mar 09, 2024 04:16 AM

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A company has a total debt ratio of 40%. The average interests rate on the companys debt

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The cost of capital for a company is the weighted average of the cost of debt and the c... View the full answer

Essentials of Managerial Finance

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