question Completion Status: Exhibit 10.1 Assume that you have been hired as a consultant by CGT, a major product of chemicals and plastics, including plastic procery bags, styrofoam cups, and fertilizers, to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below. Current assets Net plant, property, and equipment Total assets $38,000,000 $101.000.000 $139.000.000 Liabilities and Equity Accounts payable $10.000.000 Acas $9.000.000 Cenables $19,000,000 Long-term debt (40.000 bonds. $1.000 par value) 5.40.000.000 Total liabilites $59.000.000 Common stock (10 000 000 shares) $50.000.000 Total showeholders equity $80.000.000 Total abilities and shareholders' equity $139,000.00 The stock is currently selling for $15.25 per shared its rocallah $1.000,00 par valur 20-year 900% bonds with sm a l payments are selling for $930.41. The beta 1.2, the wld on a 6-month Treasury bullis 3.50 and the yield on a 20-year Treasury bend in 5 50. The required rear on the stock market is 11.50, but the market has had an a r ea of 14.50% during the past 5 years. The firm's tax rate is 25 Refer to Exhibit 10.1. Based on the CAPM what is the firm's cost of equity? Click Save and submit to save and submit. Click Save All Asseto wall annars Type here to search Exhibit 10.1 Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery bags, styrofoam cups, and fertilizers, to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below Assets Current assets Net plant, property, and equipment Total assets $38,000,000 $101.000.000 $139.000.000 Liabilities and Equity Accounts payable $10,000,000 Accruals $9.000.000 Current liabilities $19,000,000 Long-term debt (40,000 bonds, $1,000 par value) $40.000.000 Total liabilities $59.000.000 Common stock (10,000,000 shares) $30,000,000 Retained earnings $50.000.000 Total shareholders' equity $80.000.000 Total liabilities and shareholders' equity $139.000.000 The stock is currently selling for $15.25 per share, and its noncallable $1,000.00 par value, 20 year, 9.00% bonds with semiannual payments are selling for $930.41. The beta is 1.22, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond is 5.50. The required return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. The firm's tax rate is 25% Refer to Exhibit 10.1. Based on the CAPM, what is the firm's cost of equity? 114194 Click Save and Submit to save and submit Click Save All Ar to an allensters. Type here to search Reng e: 21 minutes, 55 seconds. Question Completion Status Exhibit 10.1 Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery bags, styrofoam cups, and fertilizers, to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below. Assets Current assets Net plant, property, and equipment Total assets $38,000,000 $101.000.000 $139,000.000 $10,000,000 Liabilities and Equity Accounts payable Accruals $9.000.000 Current liabilities $19,000,000 Long-term debt (40,000 bonds, $1,000 par value) $40.000.000 Total liabilities $59.000.000 Common stock (10,000,000 shares) $30,000,000 Retained earnings $50.000.000 Total shareholders' equity S80.000.000 Total liabilities and shareholders' equity $139.000.000 The stock is currently selling for $15.25 per share, and its noncallable $1,000.00 par value, 20-year, 9.00% bonds with semiannual payments are selling for 5930.41. The beta is 1.22, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond is 5.50%. The required return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. The firm's tax rate is 25% Refer to Exhibit 10.1. Based on the CAPM, what is the firm's cost of equity? 11 416 Click Save and Submit to save and submit. Click Save All Answers to save all answers Type here to search o N e * 9 3