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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 399 Weeks Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Ewer firm will finance a proposed investment by issuing new securities while maintaining its optimal capital structure of 60% debt and 40% equity. The firm can issue bonds at price of $950.00 before $15 flotation costs. The 10-year bonds will have an annual coupon rate of 8% and face value of $1,000. The company can issue new equity at a before- tax cost of 16% and its marginal tax rate at 34%. What is the appropriate cost of capital use in analyzing this project?
a) 9.97%
b) 3.36%
c) 11.81%
d) 8.77%
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