6.

The market value of Company Ts equity is $15.0 million, and the market value of its risk-free debt is $5.0 million. If the required rate of return on the equity is 20.0% and on the debt is 8.0%, calculate the companys cost of capital. (Assume no taxes)

A) 17.00%

B) 20.00%

C) 8.10%

D) 9.30%

7.

A firm has 60% of debt and 40% of equity as its capital. The cost of debt is 8%, the cost of equity is 15%, and the tax rate is 35%. Determine the firm's cost of capital.

A) 7.02%

B) 9.12%

C) 10.80%

D) 13.80%

.

Show your calculations please.

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