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Assume Tiger Corporation needs to raise in capital so it can expand its operational activities. Company issues and sells 33,000 shares of stock at

Assume Tiger Corporation needs to raise in capital so it can expand its operational activities. Company issues and sells 33,000 shares of stock at $13 each to raise the money which expect to provide a return of 5.8%. Furthermore, they sell 33,000 bonds for $50 each to raise the other in capital with expected rate of return of 9.5% where tax rate is 15%. What would be the effect of this financing on WACC if industry average is 5%?.

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Step 1 THE WACC is the overall cost of the capital It is the average of debt and equity cost compone... blur-text-image

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