Blossom Corporation is financed with debt, preferred equity, and common equity with market values of $22...

Blossom Corporation is financed with debt, preferred equity, and common equity with market values of $22 million, $14 million, and $33 million, respectively. The betas for the debt, preferred stock, and common stock are 0.2, 0.4, and 1.1, respectively. The risk-free rate is 3.99 percent, the market risk premium is 6.07 percent, and Blossom’s average and marginal tax rates are both 30 percent.

What is the company’s cost of capital? (Round intermediate calculation to 4 decimal places, e.g. 1.2512 and final answers to 3 decimal places e.g. 5.215%.)

Costs of debt			%
Costs of common equity			%
Costs of preferred equity %

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 3 weeks ago

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Blossom Corporation is financed with debt, preferred equity, and common equity with market values of $22...

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