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Assume that XYZ Corporation is a leveraged company with the following information: KI= cost of equity capital for XYZ=13 percent i= before-tax borrowing cost =8
Assume that XYZ Corporation is a leveraged company with the following information: KI= cost of equity capital for XYZ=13 percent i= before-tax borrowing cost =8 percent t= marginal corporate income tax rate =30 percent If XYZ 's debt-to-total-market-value ratio is 40 percent, then its weighted average cost of capital, K, is: 8 percent 9 percent 10 percent 12 percent
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