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Consider the following information for Blue Cow, a U.S. corporation: Stock beta: 0.7 Bond interest rate: 5% Target capital structure: 70% equity, 30% debt Tax
Consider the following information for Blue Cow, a U.S. corporation: Stock beta: 0.7 Bond interest rate: 5% Target capital structure: 70% equity, 30% debt Tax rate: 26% Treasury bond yield: 3% Expected return on the S&P 500: 6% IB Attempt 1/ Part 1 What is the cost of equity? 3+ decimals Submit IB Attempt 17 Part 2 What is the cost of capital? 4+ decimals
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