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Assume that the company has $1.2 billion in debt, its cost of debt capital (r d ) is 5%, it has $2 billion in equity,

Assume that the company has $1.2 billion in debt, its cost of debt capital (rd) is 5%, it has $2 billion in equity, and its cost of equity capital (re) is 7%. Compute the companys Weighted Average Cost of Capital.

12%

2%

6.25%

10%

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