Jones industries borrows for 10 years with an annual payment of $100,000. What is the expected interest rate (cost of debt)

Jones industries has a beta of 1.39. The risk-free rate as measured by the rate on short-term US treasury bill is 3 percent. And the expected return on the overall market is 12 percent. Determine the expected rate of return on Jones's stock (cost of equity). Here are the details

Jones total assests-$2,000,000
Long & short-term debt-$600,000
Common internal stock equity-$400,000
New common stock equity-$1,000,000
Total liabilities & equity-$2,000,000

What's the formula for calculating cot of debt? Jones industries borrow $600,000 for 10 years with an annual payment of $100,000.