Epson has one bond outstanding with a yield to maturity of 7% and a coupon...
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Epson has one bond outstanding with a yield to maturity of 7% and a coupon rate of 8%. The company has no preferred stock. Epson's beta is 1.3, the risk-free rate is 2.8% and the expected market risk premium is 6%. Epson has a target debt/equity ratio of 0.8 and a marginal tax rate of 34%.
Intro Epson has one bond outstanding with a yield to maturity of 7% and a coupon rate of 8%. The company has no preferred stock. Epson's beta is 1.3, the risk-free rate is 2.8% and the expected market risk premium is 6%. Epson has a target debt/equity ratio of 0.8 and a marginal tax rate of 34%. Attempt 1/1 for 10 pts. Part 1 What is Epson's (pre-tax) cost of debt? 7% Saved Save - Attempt 1/1 for 10 pts. Part 2 What is Epson's cost of equity? 10.6% Saved Save - Attempt 1/1 for 10 pts. Part 3 What is Epson's capital structure weight for equity, i.e., the fraction of long-term capital provided by equity? 58.82% Saved | Attempt 1/1 for 10 pts. Part 4 What is Epson's weighted average cost of capital? 3+ decimals Save
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