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Find weighted average of cost of capital

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Reference no: EM133079057

Question - The Falso Inc. currently has a bond with 10 years to mature. It pays 10% coupon compounded semi-annually. The current price of the bond is $980. The corporate tax rate is 20%. The Falso Inc.'s common stock has beta of 1.3, the risk-free rate is 3.4% and the required rate of return on the market is 12%. Also blank has 40% debt, and 60% common equity in its capital.

Required -

A. Find after-tax cost of debt.

B. Find the cost of equity.

C. Find weighted average of cost of capital.

Reference no: EM133079057

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