Question - If my company has common stock with a BETA of 1.3, a rate of 4.5% and an expected return on the market of 12%, what is my cost of equity capital?
Secondly, if my company has an outstanding debt issue with 12 years to maturity quoted at 105% of the face value and has a coupon rate of 8% annually, what is my pretax cost of debt? What is my aftertax cost if my rate goes to 35%?