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3. Fisher Corps stock price is $20.00 and there are 1 million shares outstanding. The firms cost of equity is 12%. The firm also has

3. Fisher Corps stock price is $20.00 and there are 1 million shares outstanding. The firms cost of equity is 12%. The firm also has $15 million in outstanding debt at an interest rate of 8%. The firm faces a 40% tax rate.

a. Estimate the firms weighted average cost of capital (WACC).

b. Show and explain how the weighted average cost of capital affects the value of the firm.

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