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daniella1304
24.06.2021 •
Business
Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of .73. The cost of equity is 11.5 percent and the pretax cost of debt is 6.6 percent. What is the capital structure weight of the firm's equity if the firm's tax rate is 39 percent?
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Ответ:
0.5780
Explanation:
Calculation to determine the capital structure weight of the firm's equity
Using this formula
Weight of equity = 1 / (1 + D-E)
Let plug in the formula
Weight of equity = 1 / (1 + .73)
Weight of equity = 1 / 1.73
Weight of equity = 0.5780
Therefore the capital structure weight of the firm's equity is 0.5780
Ответ:
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