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A firms current balance sheet is as follows: Assets $100 Debt $10 Equity $90 a. What is the firms weighted-average cost of capital at various

A firms current balance sheet is as follows: Assets $100 Debt $10 Equity $90 a. What is the firms weighted-average cost of capital at various combinations of debt and equity, given the following information? Debt/Assets After-Tax Cost of Debt Cost of Equity Cost of Capital 0% 8% 12% ? 10 8 12 ? 20 8 12 ? 30 8 13 ? 40 9 14 ? 50 10 15 ? 60 12 16

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