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What is epson weighted average cost of capital

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Epson has one bond outstanding with a yield to maturity of 7% and a coupon rate of 8%. The company has no preferred stock. Epson's beta is 0.5, the risk-free rate is 1.3% and the expected market risk premium is 6%.

Epson has a target debt/equity ratio of 0.8 and a marginal tax rate of 34%.

What is Epson's capital structure weight for equity, i.e., the fraction of long-term capital provided by equity?

What is Epson's weighted average cost of capital?

Reference no: EM133003582

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