The firm's tax rate is

34%

. The firm's pre-tax cost of debt is

8%

; the firm's debt-to-equity ratio is 3 ; the risk-free rate is

3%

; the beta of the firm's common stock is 1.5 ; the market risk premium is

9%

. What is the firm's cost of equity capital?\ a.

8.09%

\ b.

16.5%

\ c.

9.02%

\ d. None of the above\ Continuing the problem above, what is the firm's weighted average cost of capital?\ a.

8.09%

\ b.

10.125%

\ c.

9.02%

\ d.

13.69%

1. The firm's tax rate is 34%. The firm's pre-tax cost of debt is 8%; the firm's debt-to-equity ratio is 3 ; the risk-free rate is 3%; the beta of the firm's common stock is 1.5 ; the market risk premium is 9%. What is the firm's cost of equity capital? a. 8.09% b. 16.5% c. 9.02% d. None of the above 2. Continuing the problem above, what is the firm's weighted average cost of capital? a. 8.09% b. 10.125% c. 9.02% d. 13.69%