Question

The Five and Dime Store has a cost of equity of 14.8 percent, a pretax cost...

The Five and Dime Store has a cost of equity of 14.8 percent, a pretax cost of debt of 6.7 percent, and a tax rate of 34 percent. What is the firm's weighted average cost of capital if the debt-equity ratio is .46?

0 0
Add a comment Improve this question Transcribed image text
✔ Recommended Answer
Answer #1

After tax Cost of Debt Cost of debt *(1-Tax Rate) 0.067 (1-0.34) 0.04422 4.42% Weight of Equity Weight of Debt 1/1.46 0.46/1.

Add a comment
Know the answer?
Add Answer to:
The Five and Dime Store has a cost of equity of 14.8 percent, a pretax cost...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT