. Lizpaz Inc. is a levered firm with a debt-to-equity ratio of 0.25. The beta of the common stock is 1.15, while the beta of the debt is 0.3.The market-risk premium is 10 percent and the risk-free rate is 6 percent.The corporate tax rate is 35 percent.
If a new company project has the same risk as the overall firm, what is the weighted average cost of capital for the project?
Choose from the following:
A. 9%
B. 15.2%
C. 15.4%
D. 15.8%
Lizpaz Inc. is a levered firm with a debt-to-equity ratio of 0.25
No comments:
Post a Comment