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You have the following information about Clara's Cupcakes, a commercial bakery. Equity shares outstanding Stock price per share Yield to maturity on debt Coupon interest
You have the following information about Clara's Cupcakes, a commercial bakery. Equity shares outstanding Stock price per share Yield to maturity on debt Coupon interest rate on debt Book value of debt Beta Historical excess returns on stock (risk premium) Interest rate on government bonds (risk-free rate) Tax rate a. What is the cost of equity (KE)? Cost of Equity % 5. What is the weighted-average cost of capital? Note: Round your answer to 1 decimal place. Weighted-average cost % 20 million $40.00 7.5% 4.8% $290 million 1.5 5% 35%
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