Question 1. WACC   Cost of Debt     After-tax cost of debt   4.90%       Cost of Equity   Treasury Bond Rate (risk free rate) 5% Beta 0.48 Risk premium 7%               Years 2014 2015 2016 2017 Capital Structure         Debt 22% 25% 28% 27% Equity 78% 75% 72% 73%             Please calculate following for each of the year from 2014 to 2017 Cost of Debt (before tax) Cost of Equity WACC (Weighted Average Cost of Capital)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Question 1. WACC

 

Cost of Debt

 

 

After-tax cost of debt

 

4.90%

 

 

 

Cost of Equity

 

Treasury Bond Rate (risk free rate)

5%

Beta

0.48

Risk premium

7%

 

 

 

 

 

 

 

Years

2014

2015

2016

2017

Capital Structure

 

 

 

 

Debt

22%

25%

28%

27%

Equity

78%

75%

72%

73%

 

 

 

 

 

 

Please calculate following for each of the year from 2014 to 2017

  1. Cost of Debt (before tax)
  2. Cost of Equity
  3. WACC (Weighted Average Cost of Capital)

 

 

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