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A firm uses a target debt/equity ratio of 0.6 for all its financing decisions. The firm has two sources of long-term financing, common shares and

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A firm uses a target debt/equity ratio of 0.6 for all its financing decisions. The firm has two sources of long-term financing, common shares and a bond issue. The shares currently sell for $23 each. The estimated stock beta is 1.05, the risk-free rate is 2.6%, and the market rate of return is 14.9%. Each bond has a face value of $15,000, 16 years to maturity, and a 4% coupon rate paid semi-annually. The bond quote is 89.075. If the firm's marginal tax rate is 35%, calculate the firm's WACC. A. Cost of common share equity (nearest 1/100 of one percent without % symbol, e.g. 6.98)? B. Cost of debt (nearest 1/100 of one percent without % symbol, e.g. 6.98)? C. Weighting of common share equity (nearest 1/100 of one percent without % symbol, e.g. 6.98)? D. Weighted average cost of capital (nearest 1/100 of one percent without % symbol, e.g. 6.98)

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