Question
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Question 11 Suppose the company's market-value balance sheet is...
Question 11
Suppose the company's market-value balance sheet is as follows:
Given that the risk-free rate is 1.5% p.a. and the corporate tax rate is 19%. The beta of the company's equity is estimated to be 1.2. The market risk premium, which is the difference between the market portfolio's return and risk-free rate of return, is 4.5%. The company's after-tax weighted-average cost of capital (WACC) is:
(a) 2.84%
(b) 4.21%
(c) 3.89%
(d) 1.79%
Answer & Explanation
Solved by verified expertAnswered by abdulrahmanabdulgafar2020 on coursehero.com
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