18. The appropriate WACC of a firm is 6.43%. With risk-free rate of 4%, market return of 8% prevailing credit spread of 3% tax rate of 30% and Equity ratio of 30%, compute for the volatility of stocks or beta. a) 1.00% b) 1.25% c) 1.50% d) 1.75% 19. The appropriate WACC of a firm is 6.43%. With risk-free rate of 4%, market return of 8% prevailing credit spread of 3% tax rate of 30% and Equity ratio of 30%, compute for the after-tax cost of debt. a) 4.90%
18. The appropriate WACC of a firm is 6.43%. With risk-free rate of 4%, market return of 8% prevailing credit spread of 3% tax rate of 30% and Equity ratio of 30%, compute for the volatility of stocks or beta. a) 1.00% b) 1.25% c) 1.50% d) 1.75% 19. The appropriate WACC of a firm is 6.43%. With risk-free rate of 4%, market return of 8% prevailing credit spread of 3% tax rate of 30% and Equity ratio of 30%, compute for the after-tax cost of debt. a) 4.90%
Chapter11: The Cost Of Capital
Section: Chapter Questions
Problem 6PROB
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Transcribed Image Text:18. The appropriate WACC of a firm is 6.43%. With risk-free rate of 4%, market return of 8% prevailing credit
spread of 3% tax rate of 30% and Equity ratio of 30%, compute for the volatility of stocks or beta.
a) 1.00%
b) 1.25%
c) 1.50%
d) 1.75%
19. The appropriate WACC of a firm is 6.43%. With risk-free rate of 4%, market return of 8% prevailing credit
spread of 3% tax rate of 30% and Equity ratio of 30%, compute for the after-tax cost of debt.
a) 4.90%
b) 5.00%
c) 7.00%
d) 10.00%
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