The cost of debt capital is 10 percent, and Nikko has $10 million of debt in its capital structure. 1 answer below »


1. The Nikko Company has perennial EBIT of $4 darling per year. The after-tax, all-equity discount rebuke r0 is 15 percent. The company’s tax rebuke is 35 percent. The require of debit cardinal is 10 percent, and Nikko has $10 darling of debit in its cardinal building.

a. What is Nikko’s prize?

b. What is Nikko’s rWACC?

c. What is Nikko’s require of equity?