{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

9 - stock and $250 million in total common equity Shi’s...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
9-6 Booher Book Stores has a beta of 0.8. The yield on a 3-month T-bill is 4% and the yield on a 10 year T bond is 6%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? 9-7 Shi Importer’s balance sheet shows $300 million in debt, $50 million in preferred
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: stock, and $250 million in total common equity. Shi’s tax rate is 40%, rd=6%, rps=5.8%, and rs=12%. If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is its WACC?...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online