Question: Please answer and show each step! Gemini Industries' capital structure consists solely of debt and common equity. It can issue debt at par with a

Please answer and show each step! Gemini Industries' capital structure consists

Please answer and show each step!

Gemini Industries' capital structure consists solely of debt and common equity. It can issue debt at par with a 8 percent yield. Gemini pays dividends of S2 per share. The market risk premium is expected to be 6 percent, and the risk-free rate is expected to be 3 percent. Gemini's stock beta is 1.1. Gemini Industries' tax rate is 35 percent. If the company has 35 percent debt in its capital structure, its weighted average cost of capital is closest to: A. 6% B. 7% C. 8% D.9% E. 10%

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