1. Calculating the WACC In the previous problem, suppose the companys equity has a beta of 1.2....
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1. Calculating the WACC In the previous problem, suppose the company’s equity has a beta of 1.2. The risk-free rate is 5.2 per cent, and the market risk premium is 9 per cent. Assume that the overall cost of debt is the weighted average implied by the two outstanding debt issues. Both bonds make semi-annual payments. The tax rate is 35 per cent. What is the company’s WACC?
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