Following information for Golden Fleece Financial:
|
Long-term debt outstanding:
|
$
|
500,000
|
|
|
Current yield to maturity (rdebt):
|
|
8
|
%
|
|
Number of shares of common stock:
|
|
20,000
|
|
|
Price per share:
|
$
|
51
|
|
|
Book value per share:
|
$
|
45
|
|
|
Expected rate of return on stock (requity):
|
|
15
|
%
|
a. Calculate Golden Fleece's company cost of capital. Ignore taxes.