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Assume that your firm's marginal tax rate is 20% and that your firm has the following capital structure: Bonds coupon rate-696 yield-to-maturity-5.5% Market value of
Assume that your firm's marginal tax rate is 20% and that your firm has the following capital structure: Bonds coupon rate-696 yield-to-maturity-5.5% Market value of bonds S25 million Book value of bonds $30 million Common stock Book value of common shares S25 million Market value of common shares $50 million Required rate of return (r)-9.5% What is your firm's Weighted Average Cost of Capital (report as a raw number, ie. if it is 10.43%, plug in 10.43)
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