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 46 million shares outstanding trading for $12 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 8%, and the
corporate tax rate is 28%.
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?
a. What is Unida's unlevered cost of capital?
Unida's unlevered cost of capital is %. (Round to two decimal places.)
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Transcribed Image Text:Unida Systems has 46 million shares outstanding trading for $12 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 8%, and the corporate tax rate is 28%. 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? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is %. (Round to two decimal places.)
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