Using the information below, calculate the cost of equity. Capital structure is 25% Debt and 75% Equity

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Using the information below, calculate the cost of equity.

Capital structure is 25% Debt and 75% Equity

Company long-term debt trading at 225 bp above comparable long-term maturity governments.

Risk free rate of 2%; market risk premium is 6%; tax rate is 25%.

WACC is 10%

Related Book For answer-question

Fundamentals Of Corporate Finance

ISBN: 9780135811603

5th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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Posted Date: May 24, 2023 08:06 AM

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Using the information below, calculate the cost of equity. Capital structure is 25% Debt and 75% Equity

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To calculate the cost of equity we can use the weighted average cost of capital WACC formula and sol... View the full answer

Fundamentals Of Corporate Finance

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