We can determine the target WACC for Apix Printing Inc., given these assumptions,” she says as she hands you a piece of paper that says the following

We can determine the target WACC for Apix Printing Inc., given these assumptions,” she says as she hands you a piece of paper that says the following:

•Weights of 40% debt and 60% common equity (no preferred equity)

•A 35% tax rate
•Cost of debt is 8%
•Beta of the company is 1.5
•Risk-free rate is 2%
•Return on the market is 11%

TUTORIAL PREVIEW

Before-tax cost of debt =  8.00%

Tax rate =  35%

After-tax cost of debt = 8% (1 - 35%)

File name: Apix printing.xls File type: xls PRICE: $6