Estimate your firm's Weighted Average Cost of Capital. Assume that the current risk-free rate of interest...

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Estimate your firm's Weighted Average Cost of Capital. Assume that the current risk-free rate of interest is 3.6%, the market risk premium is 4.4%, and the corporate tax rate is 21%. Debt: Total book value: $12 million Total market value: $16 million Coupon rate: 5% Yield to Maturity: 4% Common Stock: Total book value: $10 million Total market value: $18 million Beta = 0.7 Preferred Stock: Total book value: $4 million Total market value: $6.9 million Price per share: $23 Dividend per share: $1 What is your firm's Weighted Average Cost of Capital (input as a raw number rounded to the 4 decimal places, i.e. if your answer is 7.1356%, input 7.1356)? Estimate your firm's Weighted Average Cost of Capital. Assume that the current risk-free rate of interest is 3.6%, the market risk premium is 4.4%, and the corporate tax rate is 21%. Debt: Total book value: $12 million Total market value: $16 million Coupon rate: 5% Yield to Maturity: 4% Common Stock: Total book value: $10 million Total market value: $18 million Beta = 0.7 Preferred Stock: Total book value: $4 million Total market value: $6.9 million Price per share: $23 Dividend per share: $1 What is your firm's Weighted Average Cost of Capital (input as a raw number rounded to the 4 decimal places, i.e. if your answer is 7.1356%, input 7.1356)?

Answer rating: 100% (QA)

Total Value can be computed by using the formula Total Mark... View the full answer