Assume a firm can be financed with $5000 of debt that has a market beta of 0.3 and $7000 of equity that has a beta of 1.1. If the risk-free rate is 3% and the equity premium is 5%, what is the cost of...


Assume a firm can be financed with $5000 of debt that has a market beta of 0.3 and $7000 of equity that has a beta of 1.1.  If the risk-free rate is 3% and the equity premium is 5%, what is the cost of capital of the overall firm?





a.11.2%



b. 9.9%



c. 6.8%



d. 8.0%




Jun 03, 2022
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