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Course X mike QZ9 (M X Ask Ask.con X Ask Ask.con X Ask Ask.con X Financia X Ask Ask.con X C Estimati X Course X C Estimate X + X > C A mybusinesscourse.com/platform/mod/quiz/attempt.php?attempt=4302911&cmid=241407&page=1 G a . .. BusinessCo Print 1 sheet of paper abdul Saqib Question 4 Not yet answered Marked out of 6.00 Estimating Cost of Capital Measures QZ9 (M Sprint Nextel Corporation (S) has $17.7 billion in total debt (which approximates its market value.) Each year this debt costs the company about $1.5 Destination Microsoft Print to PDF billion in interest expense. The company's market capitalization approximates $17.2 billion, its market beta is estimated 2.12, and its marginal tax rate is 35%. Assume that the risk-free rate equals 5.2% and the market premium equals 5.6%. 1 2 3 Rounding Instructions: Do not round until your final answers. Round answers to one decimal place. Pages All (a) Estimate Sprint Nextel's cost of debt capital. Color Color Finish attemp (b) What does a beta of 2.12 mean regarding the volatility of Sprint Nextel's stock price. OSprint Nextel's stock price decreases faster than the market index. OSprint Nextel's stock price follows the market index very closely. Time left 0:43:1 OSprint Nextel's stock price increases faster than the market index. More settings OSprint Nextel's stock price tends to be volatile compared to the market index. (c) Estimate Sprint Nextel's cost of equity capital. Support (d) Using your rounded answers from (a) and (c) above, estimate Sprint Nextel's weighted average cost of capital. Question 4 Not y Estimating Cost Sprint Nextel Cc terest expense. The co sk-free rate equals 5.29 Rounding Instr Print Cancel (a) Estimate Sprint Nextel's cost of debt capital. Type here to search X 10:57 AM 11/8/2020