Question
SIROM Scientific Solutions has $10 million of outstanding equity and $5 million of bank debt. The bank debt costs 5% per year. The estimated equity
SIROM Scientific Solutions has $10 million of outstanding equity and $5 million of bank debt. The bank debt costs 5% per year. The estimated equity beta is 2. If the market risk premium is 9% and the risk-free rate is 3%, compute the weighted average cost of capital if the firm's tax rate is 30%.
A) 15.17%
B) 15.93%
C) 16.68%
D) 17.44%
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Multinational Finance
Authors: Kirt Butler
2nd Edition
0324004508, 978-0324004502
