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1 . Skolits Corporation has a cost of equity of 1 0 . 7 percent and an aftertax cost of debt of 4 . 7

1. Skolits Corporation has a cost of equity of 10.7 percent and an aftertax cost of debt of 4.77 percent. The companys balance sheet lists long-term debt of $395,000 and equity of $655,000. The companys bonds sell for 106.3 percent of par and the market-to-book ratio is 3.13 times. If the companys tax rate is 25 percent, what is the WACC?

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