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Calculating unlevered cost of capital

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The Green Paddle has a cost of equity of 13.73 percent and a pre-tax cost of debt of 7.6 percent. the debt-equity ratio is 0.65 and the tax rate is 32 percent. What is green paddle's unlevered cost of capital?

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Solution describes the steps to calculate unlevered cost of capital in the given case.

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ru=unlevered cost of capital=?
Debt to equity ratio=D=0.65
Tax ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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