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Golden Fleece Financial

You are given the following information for Golden Fleece Financial.

Long-term debt outstanding: $300,000
Current yield to maturity (r debt ): 8%
Number of shares of common stock: 10,000
Price per share: $50
Book value per share: $25
Expected rate of return on stock (r equity): 15%

Calculate Golden Fleece's company cost of capital. Ignore taxes.

Solution Preview

You are given the following information for Golden Fleece Financial.

Long-term debt outstanding: $300,000
Current yield to maturity (r debt): 8%
Number of shares of common stock: 10,000
Price per share: ...

Solution Summary

This solution is comprised of a detailed explanation to calculate Golden Fleece's company cost of capital.

$2.19