An engineering firm has borrowed 725000 at 7 the, Ask an Expert

Economics

An engineering firm has borrowed $725,000 at 7%. The stockholders have invested another $600,000. The firm's retained earnings total $1.2M. The return on equity is estimated to be 11%. What is the firm's cost of capital:

(a) Before taxes?

(b) After taxes with a tax rate of 40%?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92639275

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