1 your company is entirely equity financed and has a 12, Ask an Expert

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1. Your company is entirely equity financed and has a 12% cost of equity. Suppose the company decides to issue debt with a 5% cost of debt and repurchased equity so that it will be 40% debt financed. If there are no corporate taxes and the new capital structure is expected to be permanent, what will be the new cost of equity?

2. Excess tax credit:

The corporate tax rate in Canada is 30% and the withholding dividend tax rate is 8%. If Home-depot generates $10,000 of taxable income in Canada and wants to repatriate or bring it to the Us, what is the excess tax credit calculation? [hint: use the FTC scheme clauses applicable to this calculation]

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92838468

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