Dusit is financed 22 by debt yielding 87 investors require, Ask an Expert

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Dusit is financed 22% by debt yielding 8.7%. Investors require a return of 15.7% on Dusit’s equity.

a. What is the company’s weighted-average cost of capital if the corporate tax rate is 35%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Weighted-average cost of capital %

b. What would be the company’s cost of capital if it were exempted from corporate tax? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Weighted-average cost of capital %

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Financial Management, Finance

Category:- Financial Management
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