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1. Suppose a firm has the capital structure as follows. Its tax rate is 21%. Instrument Market Value ($mil.) debt 20 preferred Stock 40 common

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1. Suppose a firm has the capital structure as follows. Its tax rate is 21%. Instrument Market Value ($mil.) debt 20 preferred Stock 40 common equity 60 What's the WACC (Weighted Average Cost of Capital)? Cost of capital 5% 7% 12%

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