The weighted average cost pf capital for Patrick Corp.
January 11th, 2018
1)The weighted average cost pf capital for Patrick Corp. is currently 10%. Patrick Corp. is considering a new project but must raise new debt to finance the project. Debt represents 25% of the capital structure. if the after tax cost of debt will rise from 6% to 10%. What is the marginal cost of capital ?2) You have determined that a stock has a required rate of return of 18%. If the market risk premium is 10.50% and the 91 day T-bill is yielding 2.50% what is the stock’s beta ?