Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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What is the weighted-average cost of capital for SKYE Corporation given the following information?
Equity shares outstanding | 1 | million |
---|---|---|
Stock price per share | $ 35 | |
Yield to maturity on debt | 7.68% | |
Book value of interest-bearing debt | $14 | million |
Coupon interest rate on debt | 9% | |
Interest rate on government bonds | 7% | |
SKYE’s equity beta | 0.75 | |
Historical excess return on stocks | 7.0% | |
Tax rate | 40% |
Note: Enter your answer to 1 decimal place.
Weighted-average cost of capital. %
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