Question: Interest is compounded annually unless stated otherwise. Payments are at the end of the year unless stated otherwise. All bonds have a face value of

Interest is compounded annually unless stated otherwise. Payments are at the end of the year unless stated otherwise. All bonds have a face value of $1000. Taxes are 0 unless specified otherwise.

4. NC has a value of $300M. Debt has a market value of $180M and a yield of 8%. Equity has a beta of 1.60. The risk-free return is 4% and the market risk premium is 10%. Tax rate is 40%. Find the weighted average cost of capital.

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