Pay for the money they will need to borrow

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Reference no: EM131559581

Eaton Corporation has established its capital budget at $35,000,000 for 2017 to complete 22 projects m the coming year. They can obtain 2/3's of the capital by soiling company stock (equity). Eaton's stock has a Market Premium o1 6.5% and the Riskless investment rate is set at 3.2%. They have a Beta of 2.12 and an effective tax rate of 42%. II they desire to have a W ACC of no more than 13%, what is the maximum rate that they can pay for the money (debt) they will need to borrow?

Reference no: EM131559581

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Pay for the money they will need to borrow : what is the maximum rate that they can pay for the money (debt) they will need to borrow?

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