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A firm has an annual dividend yield of 7.5% and a constant dividend growth rate of 3% per year. It also has five year bonds
A firm has an annual dividend yield of 7.5% and a constant dividend growth rate of 3% per year. It also has five year bonds outstanding that have an annual coupon rate of 8% and are selling at par. The firm has a 40% tax rate and a debt-to-assets ratio of 0.3. The firm's after-tax weighted average cost of capital is:(4 marks)
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