ABC Corporation has the following capital items and $200,000 in retained earnings too, and an income tax rate of 25% Source Amount YTM of 6% payable annually 15 year bonds 8 year loan: APR of 7% payable monthly Common stock: ABC's cost of equity was estimated in 14% Compute the after tax weighted average cost of capital for ABC ABC's after tax cost of debt is % (Round to two decimal places) 4 ABC's after tax weighted average cost of capital is % (Round to two decimal places) $250,000 $150,000 $400,000 CLIEB
ABC Corporation has the following capital items and $200,000 in retained earnings too, and an income tax rate of 25% Source Amount YTM of 6% payable annually 15 year bonds 8 year loan: APR of 7% payable monthly Common stock: ABC's cost of equity was estimated in 14% Compute the after tax weighted average cost of capital for ABC ABC's after tax cost of debt is % (Round to two decimal places) 4 ABC's after tax weighted average cost of capital is % (Round to two decimal places) $250,000 $150,000 $400,000 CLIEB
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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:ABC Corporation has the following capital items and $200,000 in retained earnings too, and an income tax rate of 25%
Source
Amount
YTM of 6% payable annually
15 year bonds
8 year loan
APR of 7% payable monthly
Common stock:
ABC's cost of equity was estimated in 14%
Compute the after tax weighted average cost of capital for ABC.
ABC's after tax cost of debt is% (Round to two decimal places)
k
ABC's after tax weighted average cost of capital is % (Round to two decimal places)
$250,000
$150,000
$400,000
CHEES
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