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8. Suppose a firm has the capital structure as follows. Its tax rate is 21%. Instrument Market Value ($mil.) Cost of capital debt 20 6%

8. Suppose a firm has the capital structure as follows. Its tax rate is 21%.

Instrument Market Value ($mil.) Cost of capital

debt 20 6%

preferred Stock 50 8%

common equity 70 13%

Whats the WACC (Weighted Average Cost of Capital)?

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