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BE SURE TO SAVE YOUR ANSWERS FREQUENTLY. St. Charles Corporation strives to maintain a capital structure of 44% debt and 56% equity. Investment bankers have

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BE SURE TO SAVE YOUR ANSWERS FREQUENTLY. St. Charles Corporation strives to maintain a capital structure of 44% debt and 56% equity. Investment bankers have stated that if the company were to borrow money, it would have to pay an annual interest rate of 5.2% (kd). The annual return that owners would expect for providing money (ke) is 8.5%. The firm's marginal income tax rate is a combined federal-plus-state 22%. What is its annual weighted average cost of capital (KA or WACC)? A. 6.85% B. 6.01% C. 6.54% D. 7.05% E. 6,65%

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