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The market value of XYZ Corporation's common stock is $40 million and the market value of its BBB rating corporate bond issues is $60 million.
The market value of XYZ Corporation's common stock is $40 million and the market value of its BBB rating corporate bond issues is $60 million. The beta of the company's common stock is 0.78 and the expected market risk premium is 13 percent. The default premium for BBB corporate bonds is 675 basis points. If the Treasury Bill rate is 2.25% percent and corporate tax rate is 15%, what is the firm's cost of capital
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