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Debt cost of capital using capm

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Debt cost of capital using CAPM - PMJ Company: the PMJ company had debt on their books at the end of 2015 with a credit rating of B. The yield to maturity of AA rated debt at the time was approximately 3.5%, which we assume is equal to its cost of debt. Use the data in Exhibit in 9.16 other than the YTM of the AA rated debt to assume the debt cost of capital for the PMJ company at the end of 2015. Assume the market risk premium is 6%.

Reference no: EM133110373

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