Neas-Seminars

Corpfin Mod 17: Homework


http://33771.hs2.instantasp.net/Topic2763.aspx

By NEAS - 6/28/2005 2:40:25 PM


[Below are student comments on a similar homework assignment used in past years.]
By Jim - 2/28/2020 2:42:30 AM


For part C I did
‌WACC = (rD*D*(1-TC)+ rE*E) / (D + E) = (0.08*4,000,000*(1-0.35) + 0.12*6,000,000) / (4,000,000 + 6,000,000) = 0.0928
which is higher than the borrowing rate of 8% so the tax sheild will go up
Am I correct?

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