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What is pcs tax adjusted cost of debt

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Reference no: EM132926309

Question - Assume at this point that the value of PC's equity is $45MM, the LT risk free rate is 3.5%, the beta of firms similar to PC is 1.5, the observed LT required return to the equity market is 12.25% and the appropriate size premium for a firm of PC's size is 5.2% Also assume that regardless of any answers above that PC's outstanding debt totals $30MM, the interest rate is 7% and the tax rate is 40%.

i. What is PC's cost of equity?

ii. What is PC's tax adjusted cost of debt?

iii. What is PC's WACC?

Reference no: EM132926309

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