A company has the following capital structure: D/E ratio = 0.27, Equity Beta = 0.94,...
80.2K
Verified Solution
Link Copied!
Question
Finance
A company has the following capital structure: D/E ratio = 0.27, Equity Beta = 0.94, Cost of Debt = 5.8%. The CEO proposes a new leverage, expressed by a target D/E ratio of 0.76. What would be the firm's new WACC? Assume that the marginal tax rate is 40%, risk-free rate is 3.9%, market risk premium is 5.2%, and that debt is risk less. Enter your answer as a percentage, with 2 decimals, without the percentage "%" sign. For example, if you obtain an answer equal to 0.123456, that's 12.3456%, so enter 12.35
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.