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Author Question: You were hired as a consultant to Kroncke Company, whose target capital structure is 50% debt, 20% ... (Read 56 times)

Rafic Kaaki

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on: Aug 7, 2023

Question 1

You have the following data: rRF= 5%; RPM= 6%; and b = 1.33. What is the cost of equity from retained earnings based on the CAPM approach?

◦

12.40%


◦

12.98%


◦

13.25%


◦

13.65%



Question 2

You were hired as a consultant to Kroncke Company, whose target capital structure is 50% debt, 20% preferred, and 30% common equity. The after-tax cost of debt is 6.8%, the cost of preferred is 7.9%, and the cost of retained earnings is 14%. The firm will not be issuing any new stock. What is its WACC?

◦

8.38%


◦

8.62%


◦

9.18%


◦

9.75%

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by Rafic Kaaki on Aug 7, 2023

gwisel

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Rafic Kaaki

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

ryhom

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Reply 3 on: Yesterday
Wow, this really help

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