A major producer of farm equipment

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Reference no: EM131099670

Oswego Corporation is a major producer of farm equipment. Oswego stock currently sells for $36 per share; there are 25 million shares outstanding. Oswego also has perpetual debt outstanding with an aggregate market value of $600 million and a yield of 6%. Assume that the CAPM applies. The risk free rate is 6%, and the market risk premium is 8%. Oswego's stock has a beta of 1.75. The corporate tax rate is 35%. Problem 1 What is the cost of equity for Oswego?

Reference no: EM131099670

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