Tardy Clocks Inc.(TC) has long-term bonds with a face value of $6M, the coupon rate on the bonds is 6% and the yield on the bonds is also 6%. The unleveled cost of equity is 10% and the value of TC's equity is $9.1M. The corporate tax rate is 35%. What is the required return of shareholders at Tardy?

correct answer is 11.71% - how do you get to this answer

Answer rating: 100% (QA)

To find the required return of shareholders at Tardy Clocks Inc TC we can use the weighted average c... View the full answer