Homework Answers
1.
term loan=14800000-5200000-5000000=4600000
cost of debt=((5000000/(5000000+4600000))*12%+(4600000/(5000000+4600000))*10%)*(1-28%)
=7.95%
2.
cost of equity=rf+beta*(rf-rm)
=2%+1.6*(8%-2%)
=11.6%
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