Question: 22 Question 5 (7 points) Use the following information for questions 4-5 JB Right now. Simon Co has a capital structure that consists of 20

22 Question 5 (7 points) Use the following information for questions 4-5 JB Right now. Simon Co has a capital structure that consists of 20 percent debt and 80 percent equity, based on market values. The risk free rate is 5 percent and the market risk premium is 5 percent. Currently the company's cost of equity, which is based on the CAPM. is 15 percent and its tax rate is 40 percent. The company can borrow at risk-free rate. What would be Simon's weighted average cost of capital if it were to change its capital structure to 50 percent debt and 50 percent equity? 9 8.35% 10.96% 12 0935% 10.4%

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