What is the weighted average cost of capital

Reference no: EM13258808

Baker is a levered firm with a debt-to equity ratio of .75. The Beta of common stock is 1.15. The market risk premium is 10 percent and the risk-free rate is 6 percent. The before-tax cost of debt is 9%. The corporate tax rate is 35 percent. The SML hold for the company. If a new peoject of the company has the same risk as the overall firm, what is the weighted average cost of capital?

Reference no: EM13258808

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