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10. CoffeeStop primarily sells coffee. It recently introduced a premium coffee- flavoured liqueur. Suppose the firm faces a tax rate of 35% and collects the

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10. CoffeeStop primarily sells coffee. It recently introduced a premium coffee- flavoured liqueur. Suppose the firm faces a tax rate of 35% and collects the following information. If it plans to finance 15% of the new liqueur-focused division with debt and the rest with equity, what WACC should it use for its liqueur division? Assume a cost of debt of 5.2%, a risk-free rate of 3.8% and a risk premium of 5.6%. Beta % Equity % Debt Coffee Stop 0.62 96% 4% BF Liqueurs 0.28 85% 15% The weighted average cost of capital is %. (Round to two decimal places.)

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