Question
4)The common stock of Modern Interiors has a beta of 2.98. The market rate of return is 10.2 percent and the risk-free rate is 2.9
4)The common stock of Modern Interiors has a beta of 2.98. The market rate of return is 10.2 percent and the risk-free rate is 2.9 percent. What is the cost of equity for this firm, according to the CAPM? Input your answer as a decimal rounded to four places.
5)Catnip Stores has a $20 million bond issue outstanding that currently has a market value of $21 million.The bonds pay semiannual coupons, have a coupon rate of 9.9% and a yield to maturity of 7.37%.The tax rate is 30.1%. What is the firm's pre-tax cost of debt? Input your answer as a decimal rounded to four decimal places.
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