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.

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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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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