what is the firms yearly interest and earnings, and the firms cost of equity? What s the cost of capital?

Scott Power is an electric utility that operates in a taxless world. It currently has $50 million in EBIT, $200 million in 5

percent coupon rate bonds outstanding, and $400 million in stock outstanding.

a. Determine the firm s yearly interest and earnings, and the firm s cost of equity ?What is the cost of capital?

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