Business and Accounting Assignment | Professional Essay Writers
February 26th, 2020
A company is having Return on Asset as 16%. Its total asset are 10 crores. If the firm has zero debt, its cost of equity will be 11%. If firm is leveraged, the cost of equity increases due to the existence of leverage. The income tax rate is 40%.
Analyse this case if debt amount with the firm is: )
a. 6% Debt=0 6%.
b. Debt=6 crores 6%.
c. Debt= 10 crores. Get Business help Today