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Assume a firm can be financed with 400K of debt and 600K of equity that has a beta of 2.0. If the risk-free rate is
Assume a firm can be financed with 400K of debt and 600K of equity that has a beta of 2.0. If the risk-free rate is 3.5%, corporate taxes are 30% and the equity premium is 5%, what is the cost of capital of the overall firm to the nearest 10 of a percent? a) 9.5% b) 13.5% c) 4.9% d) 4.5% e) 9.1%
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