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Key facts and assumptions concerning Kroger Company, at December 12, 2007, appear below. Using this information, answer the questions following Facts and Assumptions 4.54% 6.32%

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Key facts and assumptions concerning Kroger Company, at December 12, 2007, appear below. Using this information, answer the questions following Facts and Assumptions 4.54% 6.32% 7.50% 6.30% Yield to maturity on long-term government bo Yield to maturity on company long-term bond Coupon rate on company long-term Market price of risk, or risk premium Estimated company equity beta Stock price per share Number of shares outstanding Book value of equity Book value of interest-bearing debt Tax rate 1.05 25.97 681.2 million 4,965 million 6.674 milion 35.0% a. Estimate Kroger's cost of equity capital. b. Estimate Kroger's weighted-average cost of capital. Prepare a spreadsheet or table showing the relevant variables

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