WACC = 6.75%

Using Capital Asset Pricing Model (CAPM) to recalculate Company A's cost of equity. Then, find the MAXIMUM cost of debt for Company A above to borrow money. You have to use the same WACC you calculated from Problem S above to do this problem. 10-year Treasure Bond Annual Rate of Return = 3.00% Stock Beta value = 1125 S&P 500 Index Expected annual rate of returns Marginal Income Tax Rate = 35% Proportion of Debt to Total Capital - a. 6.10% b. 5.25% G 5.78% d. 7.05% 10% 60%