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Nextel has a beta of 1.3. The market portfolio's expected rate of return is 14%, and the risk-free rate is 6%. Nextel has 40% debt
Nextel has a beta of 1.3. The market portfolio's expected rate of return is 14%, and the risk-free rate is 6%. Nextel has 40% debt and 60% equity. The interest rate on new debt is 9%. Nextel has a marginal tax rate of 35%. What is Nextel's weighted average cost of capital?
Group of answer choices
.122
.098
.115
.140
.104
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