标题: Cost of Capital Confusions Level I Volume 4 [打印本页] 作者: bluejazzy 时间: 2013-4-10 23:39 标题: Cost of Capital Confusions Level I Volume 4
Oh, forgot one more factor: the company’s tax rate is 36%.作者: svgleeson 时间: 2013-4-10 23:40
Sorry, somehow my previous text input got cut off.
Ok. Here’s the book example:
At Volume 4 book, page 67. Table 5 WACC for Alternative Capital Structures
I tried to verify one of the answers and I took the sample of D/D+E = 0.2
Based on the table data beta=1.04; r of debt=6.5%; r of equity=8.4%; tax rate=36%; I calculated the WACC for this debttocapital ratio is 7.5%.
But the book result is 7.6%.
Am I wrong or the book wrong?
Thanks,
Hui作者: jarobi04 时间: 2013-4-10 23:40
I see. Guess I really need to reset my computer to be more precise – how many digits should we keep after the decimal point?作者: RealEstate_CFA 时间: 2013-4-10 23:40
i usually keep 5 after decimal … helps with lot of things … especially fixed income
