(Solution Document) Hi, I need to calculate the cost of capital of a fictitious company in China, I am given the capital structure in which the debt is 50% and the


Hi, I need to calculate the cost of capital of a fictitious company in China, I am given the capital structure in which the debt is 50% and the equity is 50%, they have an effective corporate tax of 35%, Their equity is as risky as the market portafolio in China, and that the average yield on its debt is equal to the risk-free rate plus a 2% credit premium, Furthermore, assume that the market risk premium is 5%, and that the company incorporates a 7% foreign risk premium to the valuation of their foreign projects.

 







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