Weighted-average cost of capital

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Reference no: EM131070548

Dusit is financed 25% by debt yielding 8.4%. Investors require a return of 15.4% on Dusit’s equity.

a. What is the company’s weighted-average cost of capital if the corporate tax rate is 35%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Weighted-average cost of capital %

b. What would be the company’s cost of capital if it were exempted from corporate tax? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Weighted-average cost of capital %

Reference no: EM131070548

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