A firm has $4 billion in A-rated bonds with an expected interest rate of 3. Its equity, worth $5 billion, is estimated to offer an expected geometric...

35.A firm has $4 billion in A-rated bonds with an expected interest rate of 3.9%. Its equity, worth $5 billion, is estimated to offer an expected geometric rate of return of about 13.4% per year. What is this firm's overall asset cost of capital?

Carry out calculations with accuracy and report answers to four decimal places.