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A firm has $100 million in stock and $300 million in bonds. The firms borrwoing rate is 8% and the expected return on the stock
A firm has $100 million in stock and $300 million in bonds. The firms borrwoing rate is 8% and the expected return on the stock is 20%. The corporate tax rate is 30%. What is the firms weighted average cost of capital?
A) 8%
B) 8.8%
C) 9.2%
D) 12%
E) 16%
F) 20%
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