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please help Thank you for highlighting, this is Q.12 Question 13 Looking at Question 12, calculate Geothermal's weighted-average cost of capital, assuming that 50% of
please help
Thank you for highlighting, this is Q.12
Question 13 Looking at Question 12, calculate Geothermal's weighted-average cost of capital, assuming that 50% of Geothermal's capital structure is equity, and 50% of the company's capital structure is debt finance. The corporate tax rate is 30%. A. 9.66% B.5.20% C. 3.21% D. 10.35% Question 12 Jo Cox decides to check whether Fred, the nerdy banker, was correct in claiming that Geothermal's cost of equity is 14%. She estimates Geothermal's beta at 1.20. The risk-free interest rate is 6%, and the long-run average market risk premium is 7.6%. What is the expected rate of return on Geothermal's common stock, assuming of course that the CAPM is true? A. 5.88% B. 15.12% C. 7.84% D. 3.65% Step by Step Solution
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