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Suppose the Debt Ratio (D/TA)is 50%, the Interest Rate on New

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Suppose the debt ratio (D/TA)is 50%, the interest rate on new debt is 8%, the current cost of equity is 16%, and the tax rate is 40%.An increase in the debt ratio to 60% would decrease the weighted average cost of capital (WACC).


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The objectives or aims that an organization seeks to achieve, which guide its strategic direction and operational activities.

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Human Resource Information System; a software or online solution that manages the data and processes of an organization's human resources department.

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