The bike shop inc has 3 million shares of stock outstanding, Ask an Expert

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The Bike Shop, Inc. has 3 million shares of stock outstanding. The stock currently sells for $14.50 per share. The firm’s debt is publicly traded and was recently quoted at 85% of face value. It has a total face value of $12 million, and it is currently priced to yield 9%. The risk free rate is 1% and the market risk premium is 6%. You’ve estimated that the firm has a beta of 1.40. The corporate tax rate is 38%. What is the cost of equity?

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Financial Management, Finance

Category:- Financial Management
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