If the cost of new common equity is higher than the cost of internal equity, why would a firm choose to issue new common stock?Why is it important to use a firm's MCC and not a firm's initial WACC to evaluate investments?Calculate the AT kd, ks, kn for the following information: Loan rates for this firm = 9% Growth rate of dividends = 4% Tax rate=30% Common Dividends at t1= $ 4.00 Price of Common Stock= $35.00 Flotation costs= 6%Your firm's ks is 10%, the cost of debt is 6% before taxes, and the tax rate is 40%.Given the following balance sheet, calculate the firm's after-tax WACC: Total assets=$25,000 Total debt= 15,000 Total equity= 10,000id
This question was answered on: May 23, 2022
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