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intermediate financial management (fin 303) 1) You found out that the corporation assets are currently valued...

intermediate financial management (fin 303)

1) You found out that the corporation assets are currently valued at $150, and that the face value of its debt is $60, which matures in 5 years.  Volatility forecast models show that the varance of traded equity of the corporation is 0.16. Assuming that the risk-free rate is 2% and market risk premium of 6%, and the corporation has a CAPM beta of 1.6. what is the cost of debt? (note all $ numbers are in millions.)    

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