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What will the relevant cost of debt be

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Question 1: Company X pays interest to the amount of R1000 a year on total liabilities of R10 000. It can also issue bonds with a YTM of 9%. What will the relevant cost of debt be when calculating that WACC for the company?

Question 2: Company Y has a target debt to equity ratio of 50%. Currently its book debt to equity ratio is 60%. The company has an after tax market cost of debt of 10% and a market cost of equity of 20%. What is the WACC for the company?

Reference no: EM132506563

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