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Assume that a firm's current capital structure consists of 32% debt and 68% common stock. Assume that the firm's before-tax cost of debt is 6.40

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Assume that a firm's current capital structure consists of 32% debt and 68% common stock. Assume that the firm's before-tax cost of debt is 6.40 percent, that its tax rate is 40 percent, and that its cost of common stock is 17.2 percent. Also assume that the risk-free rate is 4 percent and that the market risk premium is 12 percent. Determine what the firm's weighted average cost of capital will be if it changes to a capital structure of 48 percent debt and 52 percent equity (assuming no change in the cost of debt). 12.41296 12.326% O 12.069% 12.240% 12.497%

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