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CHAPTER 6: PROBLEMS common stock has a beta of 1.4. If the riskfree rate is 8 percent, the expected market Ampe return is 16 percent,

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CHAPTER 6: PROBLEMS common stock has a beta of 1.4. If the riskfree rate is 8 percent, the expected market Ampe return is 16 percent, and Ampex has $20 million of 8 percent debt with 10 years until maturity. It has a yield to maturity of 12 percent and a marginal tax rate of 50 %. DE for the company is 2.0. What is the weighted average cost of capital for Ampex? t ycar and has just paid a dividend of $.40

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