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Intro Epson has one bond outstanding with a yield to maturity of 4% and a coupon rate of 8%. The company has no preferred stock.
Intro Epson has one bond outstanding with a yield to maturity of 4% and a coupon rate of 8%. The company has no preferred stock. Epson's beta is 1.2 , the risk-free rate is 1% and the expected market risk premium is 6%. Epson has a target debt/equity ratio of 0.6 and a marginal tax rate of 34%. Part 1 Attempt 1/10 for 10 pts. What is Epson's (pre-tax) cost of debt? Part 2 Attempt 1/10 for 10 pts. What is Epson's cost of equity? Part 3 Attempt 1/10 for 10 pts. What is Epson's capital structure weight for equity, i.e., the fraction of long-term capital provided by equity? What is Epson's weighted average cost of capital
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