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Weighted average cost of capital-sirom scientific solutions

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SIROM Scientific Solutions has $8 million in equity and $5 million in bank debt on its balance sheet. The stock price is $50 and the firm has 200,000 shares outstanding. The company has outstanding semiannual debt with a price of $900 on a par value of $1,000, coupon rate of 4%, and 15 years to maturity. The estimated equity beta is 2. If the market risk premium is 7% and the risk-free rate is 4%, compute the weighted average cost of capital if the firm's tax rate is 30%.

Reference no: EM132715400

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