5 Questions
If the cost of debt is 5.65%, weight of debt is 45%, tax rate is 20%, cost of equity is 8%, then WACC is:
6.43%
f the cost of debt is 6%, the market risk premium is 7.5%, beta is 1.1, and the risk-free rate is 3%, then the WACC is (assuming a debt weight of 30%, an equity weight of 70%, and a tax rate of 40%):
8.96%
Which one of the following statements is correct
The capital asset pricing model can be used to estimate the required return of equity.
The value of a firm is maximized when the:
Weighted average cost of capital is minimized.
In a world WITHOUT tax, which one of the following is correct?
No matter what the capital structure, the overall WACC remains the same.
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