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A company is 37% financed by risk-free debt. The interest rate is 12%, the expected market risk premium is 10%, and the beta of the

A company is 37% financed by risk-free debt. The interest rate is 12%, the expected market risk premium is 10%, and the beta of the companys common stock is .62.

a.What is the company cost of capital?

b.What is the after-tax WACC, assuming that the company pays tax at a 35% rate?

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