The beta of acetates equity is 123 the firm pays no taxes, Financial Management

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The beta of acetates equity is 123 the firm pays no taxes

Acetate, Inc., has equity with a market value of $23.8 million and debt with a market value of $11.9 million. The cost of debt is 8 percent per year. Treasury bills that mature in one year yield 4 percent per year, and the expected return on the market portfolio is 10 percent. The beta of Acetate’s equity is 1.23. The firm pays no taxes. What is the firm’s weighted average cost of capital??

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Financial Management: The beta of acetates equity is 123 the firm pays no taxes

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