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A firm has the following component costs of capital: Debt (Bonds) Preferred Stock Retained Earnings Ta= 7.0% Ip - 10.0% rs Wd = .30 Wp

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A firm has the following component costs of capital: Debt (Bonds) Preferred Stock Retained Earnings Ta= 7.0% Ip - 10.0% rs Wd = .30 Wp 5.20 Ws -.50 13.0% Estimate the firm's Weighted Average Cost of Capital (WACC) assuming a tax rate of t= 40%: 6.35% O 8.65% O 9.76% 10.77%

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