Manufacturer of ball bearings-cost of equity capital

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Reference no: EM131319197

The following data pertains to Zolar Corp., a manufacturer of ball bearings (dollar amounts in millions). Total Assets $6,840 Interest-Bearing Debt $3,562 Average Pre-tax borrowing cost 11.5% Common Equity: Book Value $2,560 Market Value $12,850 Income Tax Rate 35% Market Equity Beta 1.24 Assuming that riskless rate is 4.2% and the market premium is 6.2%, calculate Zolar's cost of equity capital (i.e. the required rate of return on equity):

Reference no: EM131319197

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Manufacturer of ball bearings-cost of equity capital : The following data pertains to Zolar Corp., a manufacturer of ball bearings (dollar amounts in millions). Total Assets $6,840 Interest-Bearing Debt $3,562 Average Pre-tax borrowing cost 11.5% Common Equity: Book Value $2,560 Market Value $12,850 Inco..

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