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14 5 pts Company A has NFO of $350,000, a market value of equity of $650,000. The risk-free rate is 1%, and Company A has
14 5 pts Company A has NFO of $350,000, a market value of equity of $650,000. The risk-free rate is 1%, and Company A has an estimated cost of debt capital of 2%, and an estimated cost of equity capital of 8%. Using the Weighted Average Cost of Capital calculate the cost of capital for the firm and select the correct statement. O The cost of capital for the firm is used in the Residual Income Model & Company A has a cost of capital for the firm of 5.9%. O The cost of capital for the firm is used in the Residual Operating Income Model & Company A has a cost of capital for the firm of 5.9%. O The cost of capital for the firm is used in the Residual Income Model & Company A has a cost of capital for the firm of 6.9%. O The cost of capital for the firm is used in the Discounted Cash Flow Model & Company A has a cost of capital for the firm of 6.9%. The cost of capital for the firm is used in the Dividend Discount Model & Company A has a cost of capital for the firm of 5.9%. The cost of capital for the firm is used in the Residual Operating Income Model & Company A has a cost of capital for the firm of 6.9%
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