What is the beta on bradshaws stock

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Reference no: EM13290411

Bradshaw Steel has a capital structure with 30% debt and 70% common equity. The YTM on the company's long-term bonds is 8%, and the firm estimates that its overall composite WACC is 10%. The firm uses the CAPM to determine its cost of equity. The risk-free rate is 5.5%, the market risk premium is 5%, and the company's tax rate is 40%. What is the beta on Bradshaw's stock?

a. 1.07
b. 1.48
c. 1.31
d. 0.10
e. 1.35

 

Reference no: EM13290411

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