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a.A firm is financed with 30% debt and 70% equity. It s cost of debt is 6% and it s cost of equity is 15%.

a.A firm is financed with 30% debt and 70% equity. It s cost of debt is 6% and it s cost of equity is 15%. What would be the weighted average cost of capital for the firm if the average tax rate is 35%?

12.2%

8.63%

11.67%

13.8%

b.What is the WACC for a firm financed with 30% debt and 70% equity if the debt requires an after-tax return of 10% and equity requires a 16% return?

11.8%

13.3%

14.2%

14.8%

please answer both parts

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