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Question
A company is 31% financed by risk-free debt. The interest rate is 9%, the expected market risk premium is 7%, and the beta of the company's common stock is .68.
a. What is the company cost of capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Cost of capital %
b. What is the after-tax WACC, assuming that the company pays tax at a 40% rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
After-tax WACC %
An auditor uses the assessed level of control risk to (which is right answer)
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