Kappa Corporation has $20 million of outstanding equity and $5 million of bank debt. The estimated equity

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Kappa Corporation has $20 million of outstanding equity and $5 million of bank debt. The estimated equity beta is 2.5. The bank debt costs 4% per year.

Assume that the market risk premium is 8%, the risk-free rate is 3%, and the firm's tax rate is 25%.

What is the Weighted Average Cost of Capital of the firm? Round your answer to two decimals. If the answer is 10.42% input 10.42.

Posted Date: May 19, 2024 03:09 AM

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Kappa Corporation has $20 million of outstanding equity and $5 million of bank debt. The estimated equity

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