A firm has 5,000,000 shares of common stock outstanding, each with a market price of $8.00 per share.It has 25,000 bonds outstanding, each selling for $800.The bonds mature in 10 years, have a coupon rate of 8%, and pay coupons semi-annually.The firm's equity has a beta of 1.4, and the expected market return is 15%.The tax rate is 35% and the WACC is 15%.Calculate the risk free rate.
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