TSLA4007901	TSLA4103350	TSLA4103351	Total
Coupon Rate	1.50%	0.25%	1.25%
Last Trade Price	$168.30	$85	$81.44
Cost of Debt (Coupon amount / current market price)	0.89%	0.29%	1.54%
Outstanding Book Value	$660,000	$920,000	$1,380,000	$2,960,000
Face value of bounds	$100	$100	$100	$100
Number of outstanding bounds	6600	9200	13800	29600
Last Trade Yield (Yield to Maturity)	-21.081%	5.840%	5.585%
Market Value	$1,110,780	$782,000	$1,123,872	$3,016,652
Weighted Market Value	0.368	0.259	0.373	1
Weighted Book Value	0.223	0.311	0.466	1
Weighted average cost of capital using weighted market values = 0.37 * 0.89% + 0.26 * 0.29% + 0.37 * 1.54% = 0.9745%
Weighted average cost of capital using weighted book values = 0.22 * 0.89% + 0.31 * 0.29% + 0.47 * 1.54% = 1.0095%

The yield on the 10-year Treasury Bond is 1.88%.

The yield on the 10-year Treasury Bonds as proxies for the risk-free rate.

Cost of Equity = Risk-Free Rate + Beta * (Market Rate of Return - Risk-Free Rate)

10 Year = 0.0188 + 0.985214 * (7%) = 8.776%

Assuming SMI has a 35 percent marginal tax rate, calculate the weighted average cost of capital for SMI using book values of equity and debt from the SEC 10K or 10Q balance sheet and your calculations of the market values of equity and debt and using the cost of equity based on the 10-year Treasury Bond yield. Which cost of capital is most relevant? Why?