A firm has a $50,000,000 loan with an interest rate of 4%, a $54,100,000 bond issue with

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A firm has a $50,000,000 loan with an interest rate of 4%, a $54,100,000 bond issue with a yield to maturity of 3%, and 10,000,000 shares of stock selling at $3.47 a share. The stock's required return is 14.8%. Find the firm's cost of capital.

Risk-free rate 0.016 Market rate 0.136 Tax rate 0.30

Related Book For answer-question

Contemporary Financial Management

ISBN: 9780324289114

10th Edition

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

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Posted Date: Mar 16, 2023 01:55 AM

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A firm has a $50,000,000 loan with an interest rate of 4%, a $54,100,000 bond issue with

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Contemporary Financial Management

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