The JMP Company had debt on its books as of June, 2016, with…
The JMP Company had debt on its books as of June, 2016, with a credit rating of BB. The yield to maturity of AA-rated debt at that time was %, which we assume is equal to its cost of debt. Use the data in the table below to estimate the debt cost of capital for the JMP Company at the end of June, 2016. Assume the market risk premium is 6.5% at the end of June, 2016. Note: you cannot use symbols in your answer to this question due to the structure of the software, so if you must enter a percentage then use its decimal form (e.g., 2.2% = 0.022) and round to three decimal places.