5 A firm has 1,000,000 shares of common stock outstanding, each with a market price of $10.00 per share. It has 15,000 bonds outstanding, each selling for $900 (with a face value of $1,000). The bonds mature in 15 years, have a coupon rate of 10 percent, and pay coupons annually. The firm’s equity has a beta of 1.5, and the expected market return Is 20 percent. The tax rate is 21 percent and the WACC Is 16 percent. What is the risk-free rate? _ _ _ 11.4 percent _ 4.8 percent _ 16.0 percent
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