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A company has a cost of equity of 10 percent, a cost of bond of 8 percent, and the tax rate is 35 percent. Suppose

A company has a cost of equity of 10 percent, a cost of bond of 8 percent, and the tax rate is 35 percent. Suppose the ratio of market value of equity over the market value of bond is 2. What is the weighted average cost of capital?

8.40%

9.33%

25.20%

10.25%

7.42%

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