A project has the same risk as the firm's overall operations and must be financed externally....
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A project has the same risk as the firm's overall operations and must be financed externally. Equity costs 15 percent and debt costs 4 percent after-tax. The firm's debt/equity ratio is .8. The tax rate is 34 percent. What is the minimal internal rate of return the project must earn to be accepted? A. 51 percent B. 10.1 percent C. 6 percent D. 2 percent E. 5 percent A project has the same risk as the firm's overall operations and must be financed externally. Equity costs 15 percent and debt costs 4 percent after-tax. The firm's debt/equity ratio is .8. The tax rate is 34 percent. What is the minimal internal rate of return the project must earn to be accepted? A. 51 percent B. 10.1 percent C. 6 percent D. 2 percent E. 5 percent
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Related Book For
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
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