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Assume that XYZ Corporation is a leveraged company with the following information: cost of equity capital for XYZ = 13.00% before-tax borrowing cost = 8.00%

Assume that XYZ Corporation is a leveraged company with the following information:

cost of equity capital for XYZ = 13.00%

before-tax borrowing cost = 8.00%

marginal tax rate = 30%

Calculate the debt-to-total-market-value ratio that would result in XYZ having a weighted average cost of capital of 9.30%.

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