What is the equity market riskpremium what is the cost

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Unformatted text preview: e equity market riskpremium? What is the cost of equity? Question 3: Cost of debt Question Should we use a before-tax or after-tax rate for the Should cost of debt? Why? cost What is the applicable tax rate? What is the pre-tax cost of debt? Tables 1 and 2 Generally speaking, how to find cost of debt? Question 3: Calculation of WACC Question Cost of debt = 6.6% Cost of equity = 11.58% Additional info needed Additional – B/(B+S) = 42.2% – Tc=40% WACC WACC Question 4: Calculation of WACCs for Midland’s divisions Midland’s Should Midland compute a different WACC for Should each division? Why / why not? each Question 5:...
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This document was uploaded on 01/15/2014.

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