Current stock price = $16.92 Shares outstanding = 86,850,000 Firm beta=0.85 Firm tax rate = Market Risk Premium (Rm - Rf) = 8.00% Treasury Yield = 1.25% DEBT 28.00% Two separate debt issues... Book value of # 1 = $475,000,000 Market value of # 1 = 106.25% of par value Market YTM of # 1 = 4.64% Book value of # 2 = $125,000,000 Market value of # 2 = 109.50% of par value Market YTM of # 2 = 5.20% Based on the Capital Asset Pricing Model (CAPM), what is the firm's cost of equity capital?

Current stock price =$16.92 Shares outstanding =86,850,000 Firm beta =0.85 Firm tax rate =28.00% Market Risk Premium (RmR)=8.00% Treasury Yield =1.25% DEBT Two separate debt issues... Book value of #1=$475,000,000 Market value of #1=106.25% of par value Market YTM of \# 1=4.64% Book value of #2=$125,000,000 Market value of \# 2=109.50% of par value Market YTM of \# 2=5.20% Based on the Capital Asset Pricing Model (CAPM), what is the firm's cost of equity capital