18.

Compute the weighted average cost of capital for each of these firms. Assume a marginal tax rate of 40 percent.

- A. B. C. D. E.	Target capital structure is 45% debt and 55% common equity. Yield to maturity on bonds is 8.5% and expected return on common equity is 11.1%.
- A. B. C. D. E.	Target capital structure is 25% debt and 75% common equity. Yield to maturity on bonds is 3.7% and expected return on common equity is 14.5%.
- A. B. C. D. E.	Target capital structure is 15% debt and 85% common equity. Yield to maturity on bonds is 8.9% and expected return on common equity is 19.9%.
- A. B. C. D. E.	Target capital structure is 65% debt and 35% common equity. Yield to maturity on bonds is 5.9% and expected return on common equity is 12.9%.
- A. B. C. D. E.	Target capital structure is 85% debt and 15% common equity. Yield to maturity on bonds is 4.1% and expected return on common equity is 14.0%.

A.	8.4%
B.	6.8%
C.	11.4%
D.	4.2%
E.	17.7%