If the market risk premium is 9 and the risk-free rate is 3


SIROM Scientific Solutions has $10 million of outstanding equity and $5 million of bank debt. The bank debt costs 5% per year. The estimated equity beta is 2.

If the market risk premium is 9% and the risk-free rate is 3%, compute the weighted average cost of capital if the firm's tax rate is 30%.

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Financial Management: If the market risk premium is 9 and the risk-free rate is 3
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