Question: b. C. 0000 Rotate 8 00- H Auto Scroll Read Mode Background Screen Grab Find and Humming Birds Inc. has 2 million shares of stock

b. C. 0000 Rotate 8 00- H Auto Scroll Read Mode

b. C. 0000 Rotate 8 00- H Auto Scroll Read Mode Background" Screen Grab Find and Humming Birds Inc. has 2 million shares of stock outstanding. The stock currently sells for RM12.50 per share. The firm's debt is publicly traded and was recently quoted at 90% of face value. It has a total face value of RM10 million, and it is currently priced to yield 8%. The risk free rate is 2% and the market risk premium is 8%. You've estimated that the firm has a beta of 1.20. The corporate tax rate is 40%. PDF to Picture Annotate i. ii. iii. What is the cost of equity? What is the percentage of equity used by Humming Birds Inc.? What is the weighted average cost of capital (WACC) for Humming Birds Inc.? [9 marks] In general, the cost of debt is usually less than the cost of equity. Why? Explain your answer by giving an example. F [5 marks] Win Go to Settings to D148%

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