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Aaron Athletics is trying to determine its optimal capital structure. The company's capital structure consists of debt and common stock. In order to estimate the

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Aaron Athletics is trying to determine its optimal capital structure. The company's capital structure consists of debt and common stock. In order to estimate the cost of debt, the company has produced the following table: The company's tax rate, T, is 40 percent. The company uses the CAPM to estimate its cost of common equity, r5. The risk-free rate is 5 percent and the market risk premium is 6 percent. Aaron estimates that if it had no debt its beta would be 1.2. What is the firms WACC under an optimal capital structure? Please input your answer in decimal form. If the WACC is 5.74%, please input 0574

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