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Bridgetron An analyst wants to value the sum of the debt and equity capital of the firm and is provided with the following information: Total
Bridgetron An analyst wants to value the sum of the debt and equity capital of the firm and is provided with the following information:
Total Assets | $25,675 |
Interest-Bearing Debt | $18,525 |
Average Pre-tax borrowing cost | 9.25% |
Common Equity: | |
Book Value | $ 8,950 |
Market Value | $34,956 |
Income Tax Rate | 35% |
Market Equity Beta | 1.05 |
Risk-free Rate | 3.8% |
Market Premium | 5.7% |
An analyst wants to value the common shareholders' equity of Bridgetron, compute the relevant cost of capital that should be used. Round your answer to two decimal places. Cost of equity capital: %
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