Question: Question 17 3 points Save Arome Use the following information to answer questions 12-18 AAA Corporation and BBB Corporation are identical to every way except
Question 17 3 points Save Arome Use the following information to answer questions 12-18 AAA Corporation and BBB Corporation are identical to every way except their capital structures. As Corporation, an all equiltyfimtus 45 million shares of stock outstanding currently worth $50 per share BB Corporation uses leverage in capital structure. The market value of Bas deb is $400mil, and its cost of debts 35 percent. Each firm is expected to have earnings before interest and tax of $15miin perpetuity Assume that every investor can borrow at 35 percent per year. Corporate tax rate is 354 017. What would be the BBB corporation's weighted average cost of capital (WACC) 4.22% 4584 3.83 4.44
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