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Below is selected data about Alpha, Inc. and relevant market information: Beta of common stock 1.5 Treasury bond rate 1% Required total return on market
Below is selected data about Alpha, Inc. and relevant market information:
Beta of common stock 1.5
Treasury bond rate 1%
Required total return on market portfolio (Rm) 7%
Yield to maturity on long-term debt 6.0%
Book value of equity $500 million
Market value of equity $900 million
Long-term debt outstanding $600 million
Corporate tax rate 25%
What is the companys cost of equity, Alpha's after-tax cost of debt, and Alpha's Weighted Average Cost of Capital?
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