Part 1 of Lesson 13

(Please show me the steps)

Problem 1

Q) Suppose a firm has 41.60 million shares of common stock outstanding at a price of $34.86 per share. The firm also has 462000.00 bonds outstanding with a current price of $1,094.00. The outstanding bonds have yield to maturity 8.37%. The firm's common stock beta is 0.65 and the corporate tax rate is 37.00%. The expected market return is 14.98% and the T-bill rate is 2.09%. Compute the following:

-Weight of Equity of the firm

-Weight of Debt of the firm

-Cost of Equity of the firm