Question: Using Exhibit A Current Selected Financial Information For XYZ Yield to maturity 10.00% Market Value of debt $500 million Number of shares of common stock

Using Exhibit A Current Selected Financial Information For XYZ Yield to maturity 10.00% Market Value of debt $500 million Number of shares of common stock 30 million Market price per share of common stock $60 Cost of capital if all equity-financed 11.3% Margin tax rate 40%

19. Based on Exhibit A, ABC is best described as currently ____% debt financed and _____equity financed.

20. Based on Exhibit A, current cost of equity capital is closest to:

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