Question
XYZ Corporation is financed by 30% equity and 70% by
debt. The company has an after-tax cost of debt of 9% and the beta of shares in XYZ is 2. The risk-free rate of return is 3% and the equity risk premium is 8%. What is the after-tax weighted average cost of capital of XYZ company?Solution
Cost of equity = 3% + 2 x 8% = 19% WACC = (30% x 19%) + (70% x 9%) = 12%
According to Union Budget 2023-24, consider the following statements regarding the rationalization of Direct Tax:Â
1. Removing the minimum thr...
Which of the following is an advantage of an exchange trading system in a derivative market?
Which of the following is not an external factor leading to credit risk?                   Â
...Shares in ABC Co have a beta of 0.8.
The market is giving a return of 15% and the risk-free rate is 8%
What will be ABC's cost of equity?
Under the 2025 RBI framework for project finance, the maximum permissible extension for the original DCCO is capped at 2 years for non-infrastructure pr...
Which of the following factors does not affect the price of bullion?
1)Â Â Â Supply and demand.
2)Â Â Â Economic and political cond...
In the IFSCA circular July 2025 relating to changes by a Finance Company/Finance Unit (FC/FU) in an IFSC, which of the following is correctly described?
A company is in need of a new plant to ramp up production at its manufacturing unit. It is contemplating ways to finance the new plant and is deciding ...
If the trend of the current ratio is increasing, while the trend of the acid-test ratio is decreasing over a period of time, this could be a warning tha...
What is the primary purpose of Emergency Response?
