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A firm has a total market value of $200 millions. The market value of debt is $120 millions and that of equity is $80 millions.

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A firm has a total market value of $200 millions. The market value of debt is $120 millions and that of equity is $80 millions. The before tax cost of debt is 15%. The cost of equity is 20%. Calculate the weighted average cost of capital: (WACC): (Assume tax rate T = 35%) 13.85% 13.2% 12.32% 15.9%

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