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A firm you have been asked to analyze has $250 million in market value of debt outstanding and $750 million in equity outstanding. The debt

A firm you have been asked to analyze has $250 million in market value of debt outstanding and $750 million in equity outstanding. The debt has a Beta of 0.1 and equity has a Beta of 1.2. Assume the risk-free rate is 1% and the market premium is 7%. Assume the coupon on the debt is equal to its yield. Also assume the firm faces a 21% marginal tax rate. Which of the following describes the firm's WACC?

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