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Bippy Corporation has $400 in debt and $600 worth of equity. First, calculuate the capital structure weights by filling in cells E20:E22 and E24:E25.
Bippy Corporation has $400 in debt and $600 worth of equity. First, calculuate the capital structure weights by filling in cells E20:E22 and E24:E25. Next, calculate the Weighted Average Cost of Capital in cells E27:E29 and E31. Tax rate: 25% Cost of debt: 6% Cost of equity: 10% Debt Capital Equity Capital Total Capital Debt weight Equity weight Cost of debt Cost of equity tax rate WACC 400 600 1000
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