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Nvidia s market capitalization is 1 . 8 0 trillion dollars. It has $ 1 1 billion debt outstanding. The 1 0 - year Treasury

Nvidias market capitalization is 1.80 trillion dollars. It has $ 11 billion debt outstanding. The 10-year Treasury bond yield is 4.5%. Nvidia has an outstanding credit record and has earned an AAA rating from the major credit rating agencies. The current default premium on AAA corporate bonds is 1%. The historical risk premium for stocks over the risk-free rate of return is 6 percentage points. The firms beta is estimated to be 1.68 and its marginal tax rate, including federal, state, and local taxes is 25%.
a. What is the cost of equity?
b. What is the after-tax cost of debt?
c. What is the cost of capital?

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