Describe capital structure

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Reference no: EM132219497

Assignment Instructions: Using the given information -

1. Describe capital structure.

2. Determine the WACC given these assumptions;

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%

3. Indicate how these might be useful to determine the feasibility of the capital project.

4. Recommend which is more appropriate to apply to project evaluation.

5. Define marginal cost of capital.

Attachment:- Assignment Data File.rar

Reference no: EM132219497

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