Business, 18.12.2019 07:31, luisr0754

Sirom scientific solutions has $12 million of outstanding equity and $4 million of bank debt. the bank debt costs 4% per year. the estimated equity beta is 1. if the market risk premium is 8% and the risk-free rate is 4%, compute the weighted average cost of capital if the firm's tax rate is 30%.
a) 9.70 %
b) 8.73 %
c) 10.67%
d) 9.22%

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Sirom scientific solutions has $12 million of outstanding equity and $4 million of bank debt. the ba...