Question: I know the answer doesn't stop at 11%, but I'm not sure how to finish solving parts a & b. It's really confusing to me.

I know the answer doesn't stop at 11%, but I'm not sure how to finish solving parts a & b. It's really confusing to me.

4 . ( 15 ) A U .S . firm plans to issue 160 million in bonds and 40 million in equities to raise the capital for a project in UK Assume that the required rate of return on the corporate bond is estimated as 6 % , the risk - free rate is / the market return is 8% , and the beta of this project is estimated as 1 . 6 . The marginal corporate tax rate is 20% . Answer the following questions a Estimate the required rate of return of issuing equity using the CAPM . 3 + 1 - 6 ( 8 - 3 ) = 119 b . Estimate the WACO

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