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 .)