QUESTION 6

It's September 2020 and you are trying to estimate the cost of debt for a five year project at Boeing. Boing is currently rated BBB by S\&P and you have collected the following information on its bonds. Given this information, what is the best estimate for the cost of debt for this project? I. 0.0% II. 5.65% III. 3.1% IV. 2.35% V. 0.7 VI. 2.45% Suppose it's January 2021 and you would like to estimate the unlevered cost of capital (r) for Atlas Corp. The current share price of Atlas is $10 and there are 20 million shares outstanding. You have estimated Atlas' equity beta as 0.85, and its cost of debt (rD) as 3.75%. The risk-free rate is 2.5% and the market risk premium is 7%. In addtion, the table below shows the current balance sheet of the firm. Assume that all cash and short-term investments are excess cash. Based on the information provided, what is the best estimate the unlevered cost of capital for Atlas Corp? Select one. 1.7.372 2.8.45% 3.5.73% 4. 6.23% It's September 2020 and you are trying to estimate the cost of debt for a five year project at Boeing. Boing is currently rated BBB by S\&P and you have collected the following information on its bonds. Given this information, what is the best estimate for the cost of debt for this project? I. 0.0% II. 5.65% III. 3.1% IV. 2.35% V. 0.7 VI. 2.45% Suppose it's January 2021 and you would like to estimate the unlevered cost of capital (r) for Atlas Corp. The current share price of Atlas is $10 and there are 20 million shares outstanding. You have estimated Atlas' equity beta as 0.85, and its cost of debt (rD) as 3.75%. The risk-free rate is 2.5% and the market risk premium is 7%. In addtion, the table below shows the current balance sheet of the firm. Assume that all cash and short-term investments are excess cash. Based on the information provided, what is the best estimate the unlevered cost of capital for Atlas Corp? Select one. 1.7.372 2.8.45% 3.5.73% 4. 6.23%