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A firm has a capital structure of 30% debt, 60% common equity, and 10% preferred equity. Note: the capital structure represent the weights. Debt: The
A firm has a capital structure of 30% debt, 60% common equity, and 10% preferred equity. Note: the capital structure represent the weights. Debt: The bonds pay a 8% semiannual coupon, have a $1000 par value, and have a maturity length of 7 years. The quoted price of the bonds is 110. Common: The firm has common stock with a beta of 1.25. Preferred: The firm has 7% preferred stock. Market: The rate on Treasury bills is 2%, the expected return is 10%, and the tax rate facing the firm is 40%. What is the firm's cost of debt? Round to two decimals Enter your answer in percent and omit the % symbol. For example, if your answer is 0.05347 enter 5.35 What is the firm's cost of equity? Round to two decimals Enter your answer in percent and omit the % symbol. For example, if your answer is 0.05347 enter 5.35 What is the firm's weighted average cost of capital? Round to two decimals Enter your answer in percent and omit the % symbol. For example, if your answer is 0.05347 enter 5.35
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