B. 10 %
C. 11 %
D. None of the above.
Question 15 of 25
4.0 / 4.0 Points
The market value of XYZ Corporation ' s common stock is 40 million and the market value of the risk-free debt is 60 million. The beta of the company ' s common stock is 0.8, and the expected market risk premium is 10 %. If the Treasury bill rate is 6 %, what is the firm ' s cost of capital?( Assume no taxes.)