This is the equation:
8%x (1-40%) D+15% (1-D) =10.41%
=> D=45% , E= 1-45% =55%
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SUNNY
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Original Message:
Sent: 08-31-2017 10:06 PM
From: Ana Cortez
Subject: Help
Can anyone explain me this pb. Thank you!
A company's capital structure consists entirely of long-term debt and common equity. The cost of capital for each component is shown below.
The company pays taxes at a rate of 40%. If the weighted average cost of capital is 10.41%, what proportion of the company's capital structure is in the form of long-term debt? |
Ana M. Cortez