9-6 Booher Book Stores has a beta of 0.8.. The yield on a 3-month T-bill is 4% and the yield on a 10-year government bond is 6%. The market risk premium is 5.5%, but the stock marke return in the previous years was 15%. What is the estimated cost of common equity ig the CAPM? Cost of Equity CAPM Shi Importers' balance sheet shows $300 million in debt. S50 million in preferred stock and $250 million inf total common equity. Shi faces a 30% tax rate and the following data r,- r-5.8%, and r,- 12%. If Shi has a target capital structure of 30% debt. 5% preferned stock and 65% common stock, what is Shi's WACC 9-7 WACC 9.354 9-8 Ridgeway Motors has a target capital structure of 30% debt and 70% equity. The yield to maturity on the company's outstanding bonds is 8%, and the company's tax rate is 300% Ridgeway's CFO has calculated the company's WACC as 9.38%. of equity capital? WACC What is the company's cost Intermediate Problems 9-15