M&M Proposition $2$ Assume that capital markets are perfect, then calculate the cost of debt for

a group of firms that each are worth $$5\mathrm{.}9$ million, have a weighted average cost of capital of

$17\mathrm{.}5\%,$ and the following equity value and expected return.

Firm A: $$2\mathrm{.}3$ million of equity with a $28\%$ expected return

Firm B: $$2\mathrm{.}9$ million of equity with a $25\%$ expected return

Firm C: $$3\mathrm{.}5$ million of equity with a $23\%$ expected return

Ignoring taxes, the cost of debt for Firm A is

Ignoring taxes, the cost of debt for Firm B is

Ignoring taxes, the cost of debt for Firm $C$ is

$\%.($Round to two decimal places.$)$

$\%.($Round to two decimal places.$)$

$\%.($Round to two decimal places.$)$