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A firm's cost of equity capital is 13% and its pre-tax cost of debt capital is 5%. The firm's tax rate is 31%. The firm
A firm's cost of equity capital is 13% and its pre-tax cost of debt capital is 5%. The
firm's tax rate is 31%. The firm is financed with $600 million in equity and $200
million in debt. The risk-free rate is 3%. What is the firm's weighted average cost of
capital? Round all intermediate calculations to 6 decimal points. Your final answer
should be within 0.10% of the correct answer choice.
11.00%
10.61%
9.00%
13.50%
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