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boland boland
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7 years ago
Johnson Fuel Systems has a weighted average cost of capital of 7.35%.  Estimate Johnson's cost of equity given the following information:  The firm's effective tax rate is 25%, they have an equal mix of debt and equity, the required return on the market portfolio is 9%, Johnson has a before-tax cost of debt of 6%, and the risk-free rate of return is 3%.
A) 9.00%
B) 10.20%
C) 5.10%
D) 2.25%
Textbook 
Fundamentals of Multinational Finance

Fundamentals of Multinational Finance


Edition: 5th
Authors:
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noxx53noxx53
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