Estimating cost of capital measures us steel has 316, Financial Management

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Estimating cost of capital measures us steel has 316

Estimating Cost of Capital Measures US Steel has $3.16 billion in total debt (which approximates its market value). Interest expense for the year was about $214.0 million. The company’s market capitalization is approximately $1.17 billion, its market beta is 2.65, and its assumed tax rate is 37%. Assume that the risk-free rate equals 2.5% and the market premium equals 5%

Rounding Instructions: Do not round until your final answers. Round answers to one decimal place.

(a) Estimate US Steel's cost of debt capital. Answer______ %

(d) Using your rounded answers from (a) and (c) above, estimate US Steel's weighted average cost of capital. Answer_______%

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