Solution-Compute the weighted average cost of capital

Compute the weighted average cost of capital

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Question - A company will be financing its operations with a capital budget of P40,000,000 and a debt-to-equity ratio of 1. The interest rate on the company's debt is 10%. The expected return on equity by the shareholders is 16.66% while the budgeted net income by management is P6,000,000. Assuming that the company's tax rate is 40%, compute the weighted average cost of capital.

Reference no: EM133096484

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Compute the weighted average cost of capital

Reference no: EM133096484

Reference no: EM133096484

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