Topic: The pre tax Cost of Debt for a New Issue of Debt Is Determined by
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What is the pre tax cost of debt for a new issue of debt is deter...
The investor's required rate of return on i... Read More »
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How to Calculate the Pre-tax Cost of a Debt
Cost of debt is what it costs a company to maintain debt. The amount of debt is normally calculated as the after-tax cost of debt because interest on debt is normally tax-deductible. The general formula for after-tax cost of debt then is pr... Read More »
Source: http://www.ehow.com/how_6554181_calculate-pre_tax-cost-debt.html?...
Asset beta is 1.10 debt beta 0.25. market risk premium 6 in both ...
WACC=Re(E/V)+Rd(1-Tc)(D/V) Acording to CAPM Re=Rf+(Rm-Rf)Be Rd=Rf+(Rm-Rf)Bd Also Ba=(D/V)Bd+(E/V)Be Be=[Ba-(D/V)Bd]/(E/V) WACC=[Ba-(D/V)Bd]/(E/V)(E/V)+[Rf+(Rm-Rf)Bd](1-Tc)(D/V) ill leave it too you to do the calculations as i really cant be... Read More »
Source: http://wiki.answers.com/Q/Asset_beta_is_1.10_debt_beta_0.25._mark...
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