* Exam page 2 of 2 X atsapp.com * You have been asked to assess the cost of capital and return on capital for MSFT Corporation. The following information is provided to you: The firm has 15 million shares outstanding, trading at $ 10 per share. The book value of equity is $ 50million. The firm has $ 50 million bond offering outstanding, with a coupon rate of 7%. trading at par. In addition, the firm has an old bank loan on its books, with 5 years left to maturity, an 8% stated Interest rate, and a face value of $ 50 millon. The firm's current batals 1.20. the treasury bond rate is 6% and the market risk premium is 5.5% The firm also reported earnings before interest and taxes of $ 40 million (after operating lease expenses), and has a marginal tax rate of 40%. a. Estimate the market value of the outstanding debt2pts), b. Estimate the cost of capital for the fimm(1pts). c. Estimate the return on capital for the firm (2pts) 87*F Sunny AYA OSO? De