Assume that XYZ Corporation is a levered company with the following information: Kl = cost of...
Assume that XYZ Corporation is a levered company with the following information: Kl = cost of levered equity capital for XYZ = 13 percent i = before-tax borrowing cost = 8 percent t = marginal corporate income tax rate = 30 percent If XYZ's debt-to-total-market-value ratio is 40 percent, then its weighted average cost of capital, K, is?
Homework Answers
Weighted average cost of capital = 10%
After tax cost of debt = 8* (1-30%) = 5.6%
Cost of equity = 13%
| Type | Cost | Weights | WACC |
| Debt | 5.60% | 0.4 | 2.24% |
| Equity | 13% | 0.6 | 7.80% |
| Total | 10.04% |
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Assume that XYZ Corporation is a levered company with the
following information: Kl = cost of...
I need some one to tell me how to answer it step by step please I...
I need some one to tell me how to answer it step by step
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I included the answer but I need someone to break it down for
me.
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I need some one to tell me how to answer it step by step
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I included the answer but I need someone to break it down for
me.
Thank you
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