SIROM Scientific Solutions Has $4 Million of Outstanding Equity and $12

question 56

Multiple Choice

SIROM Scientific Solutions has $4 million of outstanding equity and $12 million of bank debt.The bank debt costs 5% per year.The estimated equity beta is 1.If the market risk premium is 7% and the risk-free rate is 4%,compute the weighted average cost of capital if the firm's tax rate is 30%.

• A)4.65%
• B)5.01%
• C)5.38%
• D)5.98%

---

Definitions:

Sexual Preference

An individual's pattern of sexual attraction to males, females, both, or neither, based on various factors.

Juvenile Delinquency

Conduct in a child or adolescent characterized by illegal activities.

Homicide

The deliberate and unlawful killing of one person by another; murder.

High School

An education institution for students, typically between the ages of 14 and 18, that follows primary school and precedes higher education.