Dakota chemical incs dividend yield is 2 the company pays, Ask an Expert

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Dakota Chemical Inc's dividend yield is 2%. The company pays an 8% interest rate on loans. Dakota is estimating its cost of capital.

A) Can we use 8% as the c?ost of capital? Why or why not?

B) Do you conclude that the cost of equity is lower than the cost of debt for Dakota? Explain.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91595843

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