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A firm's optimal capital structure is 80% debt and 20% common equity. Bank loans for this company will average 7 percent pre-tax. The firm is

A firm's optimal capital structure is 80% debt and 20% common equity. Bank loans for this company will average 7 percent pre-tax. The firm is in a 46% tax bracket. If the firm's equity beta is 1.3 (assume a risk-free rate of interest of 4.6% and a risk premium of 6.4%), what is the firm's weighted average cost of capital?

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