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Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery bags, styrofoam cups, and

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Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery bags, styrofoam cups, and fertilizers, to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below. The stock is currently selling tor 319.25 per snare, and ns noncaunumen, wrown po. value, 20 -year, 9.00% bonds with semiannual payments are selling for 5930.41. The beta is 1.22, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond is 5.50%. The required retum on the stock market is 11.50%, but the market has had an average annual retum of 14.50% during the past 5 years. The firm's tax rate is 25%

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