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A company has the following capital structure: D/E ratio = 0.22, Equity Beta = 1.12, Cost of Debt = 6.3%. The CEO proposes a new
A company has the following capital structure: D/E ratio = 0.22, Equity Beta = 1.12, Cost of Debt = 6.3%. The CEO proposes a new leverage, expressed by a target D/E ratio of 0.79. What would be the firm's new WACC? Assume that the marginal tax rate is 40%, risk-free rate is 4.6%, market risk premium is 5%, and that debt is risk less. Enter your answer as a percentage, with 2 decimals, without the percentage "%" sign. For example, if you obtain an answer equal to 0.123456, that's 12.3456%, so enter 12.35.
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