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Yoyo Sdn Bhd has RM30 million long-term debt outstanding at a cost of 7%. It has 3 million unitsofshareswithamarketpriceofRM15perunit.Thecompany'srequiredrateof return on equity is 13% and

Yoyo Sdn Bhd has RM30 million long-term debt outstanding at a cost of 7%. It has 3 million unitsofshareswithamarketpriceofRM15perunit.Thecompany'srequiredrateof return

on equity is 13% and company tax rate is 25%.

a. Compute firm's equivalent unlevered cost of equity and its overall cost of capital.

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