Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Unida Systems has 32 million shares outstanding trading for $9 per share. In addition, Unida has $85 million in outstanding debt. Suppose Unida’s equity cost of capital is 13%, its debt cost of capital is 9%, and the corporation tax rate is 32%.
a) What is Unida’s unlevered cost of capital?

b) What is Unida’s after-tax debt cost of capital?

c) What is Unida’s weighted average cost of capital?

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