ABC is a manufacturer.
Long term debt, with an incremental borrowing rate of 6%
Capital stock with the following information
Risk free rate 4%, market rate of return 12%, Beta 1.25.
Long term debt 40% of total financing
capital stock 60% of total financing
Corporation tax rate is 40%
Using CAPM compute the cost of equity financing?
Compute the weighted average cost of capital (WACC)?