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Business, 18.12.2019 18:31 jessecabrown1

Action inc. has $80 million in debt and 60% of its capital structure consists of common equity. the firm has no preferred stock. the firm’s bonds have a coupon rate of 9% and ytm of 8.5%, and the firm is subject to a 30% corporate tax rate. the firm has common stock with a beta of 1.25. the risk free rate on treasury bills is 4% and the expected market risk premium is 10%. what is the minimum after-tax rate of return that action must earn on its investments?

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Action inc. has $80 million in debt and 60% of its capital structure consists of common equity. the...
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