Question: Using the following data: Debt Market value - $7,000,000 Current yield to maturity 8% Equity Market value - $35,000,000 Tax rate 35% Expected return on

Using the following data:

  • Debt
    • Market value - $7,000,000
    • Current yield to maturity 8%
  • Equity
    • Market value - $35,000,000
  • Tax rate 35%
  • Expected return on market 10%
  • Current 10 year US Treasury 2.3%
  • Beta 1.60

Calculate weighted average cost of capital

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