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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 44
Medzyme Pharmaceuticals has maintained a 50-50 D-E mix for capital investments. Equity capital has cost 11%; however, debt capital that historically cost 9% has now increased by 20% per year.
If Medzyme does not want to exceed its historical weighted average cost of capital (WACC), and it is forced to go to a D-E mix of 75-25, the maximum acceptable cost of equity capital is closest to:
a) 7.6%
b) 9.2%
c) 9.8%
d) 10.9%
If Medzyme does not want to exceed its historical weighted average cost of capital (WACC), and it is forced to go to a D-E mix of 75-25, the maximum acceptable cost of equity capital is closest to:
a) 7.6%
b) 9.2%
c) 9.8%
d) 10.9%
Explanation
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With D-E mix of 50:50, weighted cost of ...
Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin
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