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solong [7]
3 years ago
7

Company A Company B Market Value of Equity $250,000 $200,000 Market Value of Debt $600,000 $500,000 Cost of Equity 8% 10% Cost o

f Debt 2% 2% Tax Rate 35% 30% Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 5%? a) Neither Company A nor Company B b) Only Company B c) Only Company A d) Both Company A and Company B
Business
1 answer:
mihalych1998 [28]3 years ago
3 0

Answer:

Neither company

Explanation:

They did not receive an investment.

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$1,375

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