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Branson Manufacturing has a target debt-equity ratio of .35. Its cost of equity is 11 percent, and its pretax cost of debt is 6
Branson Manufacturing has a target debt-equity ratio of .35. Its cost of equity is 11 percent, and its pretax cost of debt is 6 percent. If the tax rate is 21 percent, what is the company's WACC? Input Area: Debt-equity ratio Cost of equity Cost of debt Tax rate 0.35 11% 6% 21% (Use cells A6 to B9 from the given information to complete this question.) Area: Market value of equity Market value of Bond I Market value of Bond II Total market value of company Weight of equity Weight of Bond I Weight of Bond II Pretax cost of Bond I Aftertax cost of Bond I Pretax cost of Bond II Aftertax cost of Bond II Cost of equity WACC
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