How the company's WACC and the capital cost will change?
B Joe & C, 04 in the next few years a lot of money on R & D expenditures, and panning I can not feel all the tax shield on debt-equity ratio 42.75% Can be generated by use. The company considered 20% debt The rate was lowered. How the company's WACC and the cost of capital Will that change? The low home equity debt as a percentage of the cost of the 8% Will be reduced. 【Hint: changes in the debt ratio of debt to tax Before you can reduce your costs. The problem, "" Step 3 Use Can be resolved and the WACC relevering unlevering to handle.) Reference. Step 1 : Unlever WACC also the opportunity cost of the urethra Step 2: Calculate the cost of stock Calculate the debt ratio of 20%. Step 3: Calculate the new WACC. [Note: r a = Floor L / W + complete freedom, V, = r re + (raーFloor) D / E]
What is WACC?
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