w www Suppose a firm has long-term bonds outstanding with a market value of $125 million and a yield-to-maturity of 4.2%. The firm also has 3 million shares of preferred equity outstanding the preferrec stock currently sells for $17.65 per share and pays a dividend of $1.20. The firm has 15 million shares of common stock outstanding that currently trade at $25.30 per share and have a beta of 1.15. Suppose that the expected return of the market is 7.5%, the yield on the 1-month Treasury is 1.0%, and the firm's effective tax rate is 21%. Your task Use the CAPM to determine the firm's cost of equity