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Based on the following information, do I need to change the risk adjustment on my model to 3%?

Based on the following information, do I need to change the risk adjustment on my model to 3%?
"Assume that KF's tax rate is 30%. The firm's WACC is 10%, but KF adjusts this amount up or down by 3 percentage points for projects with substantially more or less risk than average"


I have the following data in the model:
Tax rate 30.0%
WACC 10.0%
Risk adjustor 0.0%

Is this correct?

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Top Answer

Dear Student, Yes it should... View the full answer

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