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25. A company has $1 million in debt and $2 million in equity. The interest rate on its debt is 5%, and the required rate
25. A company has $1 million in debt and $2 million in equity. The interest rate on its debt is 5%, and the required rate of return on its equity is 15%. Its effective tax rate is 30%. What is its weighted average cost of capital (WACC)? 26. Nolekce is funded 100% through equity. The required rate of return to its equity is 15%. Alldebtco is funded 100% through debt; the interest rate on its debt is 6% and its tax rate is 20%. Suppose Nolexco and Alldebtco merge. After the merger, they have $5 million in debt and the market cap of their equity is $10 million. What will the WACC be for the combined company
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