Law homework help
Law homework help. Running Shoe, Inc has 2 million shares of stock outstanding. It currently sells for $12.50 a share. The firm’s debt is publicly traded and was recently quoted at 90% face value. It has a total face value of $10M and is currently priced to yield 8%. Risk free rate = 2%. Market risk premium = 8%. Beta = 1.2. Tax rate = 40%. What is the cost of equity? I got this one by taking Risk free rate + Market rate * Beta = 11.6%What is the percentage of equity used by the firm? I think I need to divide total debts by total assets? But I know the answer is 73.53% and I’m not able to get to that answer, so I think I’m calculating debts and assets wrong.What is the WACC? I’m having trouble identifying the weights and required rates of return in the equations to get to the answer, which I know is 9.8%Thanks!!