Janet Adams, CFA, is reviewing Rival Company's financial statements. Rival's long-term debt
totals $35 million, while total shareholder equity equals $140 million. Rival's long-term debt has a
YTM of 9%.Rival's tax rate is 40% and its beta is 0.9. Adams gathers the following
additional facts:
Treasury bills earn 4.0%.
The equity risk premium is 4.5%.
Based on the information provided, Rival's weighted average cost of capital is closest to:
A. 4.6%.
B. 7.5%.
C. 8.2% | 
发表于 2009-12-2 22:35
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