Multiple Choice
A project has an IRR of 16% and is being considered by a firm with $5 million in debt and $15 million in equity. Assuming the debt costs 12% (after-tax value) , what is the most equity can cost for the project to be acceptable to the firm? (hint: set the IRR equal to WACC)
A) 18.25%
B) 17.83%
C) 17.33%
D) 16.89%
Correct Answer:
Verified
Correct Answer:
Verified
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