QUESTION 3 The expected return on the market is 12.47%, the risk-free rate is 4.21%, and the tax rate is 22.00%. Semper Fun Sports has 300,000 common shares outstanding that are priced at $41.30 per share and have an expected return of 16.61% and an expected real return of 14.58%. Last year, Semper Fun Sports common stock had a return of 11.96%. The company also has 400,000 shares of preferred stock outstanding that are priced at $15.37 per share and have an expected return of 13.25% and an expected real return of 12.00%. Last year, Semper Fun Sports preferred stock had a return of 8.74%. Finally, the company has 10,000 bonds outstanding with a coupon rate of 9.84%, yield-to-maturity of 4.38%, current yield of 8.80% , face value of $1,000.00, and price of $1,240.00. What is the weighted average cost of capital for Semper Fun Sports? O 10.97% (plus or minus 0.02 percent) 11.04% (plus or minus 0.02 percent) O 10.65% (plus or minus 0.02 percent) 12.04% (plus or minus 0.02 percent) None of the above is within .02 percentage points of the correct answer

The expected return on the market is 12.47%, the risk-free rate is 4.21%, and the tax rate is 22.00%. Semper fun Sports has 300,000 common shares outstanding that are priced at $41,30 per share and have an expected return of 16.61% and an expected real return of 14.58\%. Last year, Semper fun Sports common stock had a return of 11.96%. The company also has 400,000 shares of preferred stock outstanding that are priced at 515,37 per share and have an expected return of 13.25w and an expected real return of 12.00%. Last year, Semper fun Sports preferred stock had a return of 8.74%. Finally, the company has 10.000 bonds outstanding with a coupon rate of 9.84%, yield-to-maturity of 4.38%, current yield of 8.80%, face value of $1,000.00, and price of $1,240.00. What is the weighted awerage cost of capital for Semper Fun Sports? 10.97% (plus or minus 0.02 percent) 11.04% (plus or minus 0.02 percent) 10.65% (plus or minus 0.02 percent) 12.04% (plus or minus 0.02 percent) None of the above is within 02 percentage points of the correct