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Sirtex Medical has $10 million of outstanding equity and $5 million of bank debt. The bank debt costs 5% per year. The estimated equity beta
Sirtex Medical 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 7% and the risk-free rate is 4%, compute the weighted average cost of capital if the firms tax rate is 30%.
A. | 13.16%
| |
B. | 13.52%
| |
C. | 13.76% | |
D. | 14.21%
|
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