Question: = x, X A.A. 1 Normal T No Spac... Heading 1 Heading a Font Paragraph Styles 5. Beatles Pest Removal Inc. has the following capital

 = x, X A.A. 1 Normal T No Spac... Heading 1

= x, X A.A. 1 Normal T No Spac... Heading 1 Heading a Font Paragraph Styles 5. Beatles Pest Removal Inc. has the following capital structure: 65% common stock 5% preferred stock 30% long-term debt The risk premium of Beatles Pest Removal's stock vs. 90-day T-Bills is 128. The risk-free rate equals 5%. The yield to maturity of 20-year us Govt. bonds is 6.08. Beatles' credit rating is BBB+ and the credit spread for BBB+ debt is 1.58. Beatles Pest Removal's effective tax rate is 35%. The company recently issued preferred stock that pays a 10% dividend. Issuance costs were 5% of par. (30 pts)

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