Question
ABC's common stock market value is $10 million, and the market value of its risk-free debt is $10 million. ABC's beta is 1.36, and the
ABC's common stock market value is $10 million, and the market value of its risk-free debt is $10 million. ABC's beta is 1.36, and the market risk premium is 0.14. If the T-bill rate is 0.04, what is ABC's cost of capital? (Assume no taxes.)
[round to 2 decimal places]
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Cases In Financial Reporting
Authors: Ellen Engel, D. Eric Hirst, Mary Lea McAnally
7th Edition
1934319791, 9781934319796
