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linda_us
linda_us, Master's Degree
Category: Multiple Problems
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Experience:  A tutor for Business, Finance, Accounts and other related topics.
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If the firms bonds earn a return of 12%, what is the cost of

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If the firms bonds earn a return of 12%, what is the cost of common equity based on the bond-yield-plus-risk premium approach using the midpoint of the risk premium range?
Submitted: 8 months ago.
Category: Multiple Problems
Customer: replied 8 months ago.
Firms are interested in the after-tax cost of debt in calculating the WACC because:A - We are interested in maximizing the value of the firms stock, and the stock price depends on after-tax cash flowsB - None of the aboveC - There is an opportunity cost for retained earningsD - Debt, preferred stock and common equity is tax deductible
Expert:  F. Naz replied 8 months ago.

This is your exam MCQ or practice question?