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Your boss has just asked you to calculate your firm's cost of capital. Below is potentially relevant information for your calculation. What is your firm's
Your boss has just asked you to calculate your firm's cost of capital. Below is potentially relevant information for your calculation. What is your firm's Weighted Average Cost of Capital? Common Equity: Book Value =$118 million, Market Value =$180 million, Net income from most recent fiscal year =$10million, Required rate of retum (from CAPM) =10%, Dividend Yield =3%. Debt: Book Value =$109 million, Market Value =$89 million, average coupon rate =6%, average yield to maturity =4.5%, average maturity =18 years. Corporate Tax Rate =55%. (ENTER as a RAW NUMBER rounded to FOUR DECIMAL PLACES, 1.e. If your answer is 7.1356%, enter 7.1356)
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