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A firm has a capital structure with $75 million in equity and $45 million of debt. The cost of equity capital is 10% and the

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A firm has a capital structure with $75 million in equity and $45 million of debt. The cost of equity capital is 10% and the pretax cost of debt is 7%. If the marginal tax rate of the firm is 40%, compute the weighted average cost of capital of the firm. 7.8% 6.7% 8.6% 7.0%

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