Lis company has 50 million in long-term debt 75 million in, Ask an Expert

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LIS Company has $50 million in long-term debt, $75 million in shareholder’s equity [both figures are market value basis]. The cost of equity is 14%, cost of long-term debt is 12% and the tax rate is 25%. What is the weighted average cost of capital [WACC] for LIS? LIS Company has a pretax income of $12.5 million. What is the value of the company based on correct calculation of #1?

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Financial Management, Finance

Category:- Financial Management
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