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A firm has a bank loan with a 10% interest rate. The firm also has in issue 8% preference shares trading at nominal value and

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A firm has a bank loan with a 10% interest rate. The firm also has in issue 8% preference shares trading at nominal value and has estimated that its cost of ordinary shares is 18%. The firm has a 30% tax rate. What is the weighted average cost of capital if the firm uses a capital structure comprising 50% debt and an even split between preference and ordinary shares

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