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Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin
Edition 7ISBN: 978-0073376301Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin
Edition 7ISBN: 978-0073376301 Exercise 57
The cost of debt capital is lower after taxes than before taxes. The cost of equity capital is more difficult to estimate using the dividend method or the CAPM model, for example, yet the after-tax and before-tax cost of equity capital is the same. Why are the after-tax rates not the same for both types of financing
Explanation
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Equity financing means the firm is using...
Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin
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