Portland Forest Products Inc. has a cost of debt of 8%, the risk-free interest rate is 3.5% and the expected return on the market portfolio is 8.5%. Portland’s effective tax rate is 30% and its optimal capital structure is 40% debt and 60% equity. If Portland has a beta of 1.2, what is the firm’s weighted average cost of capital?

Portland Forest Products Inc. has a cost of debt of 8%, the risk-free interest rate is 3.5%and the expected return on the market portfolio is 8.5%. Portland’s effective tax rate is30% and its…