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ABC Corp. has a dividend yield of 3%. Dividends are expected to grow at 6% annually for the foreseeable future. It has 5% semi-annual coupon
ABC Corp. has a dividend yield of 3%. Dividends are expected to grow at 6% annually for the foreseeable future. It has 5% semi-annual coupon bonds outstanding with 5 years left to maturity that are trading at 103.45. If the company issues equal amounts of debt and equity for financing, what is its cost of capital assuming a 21% tax rate?
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