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calculate the after tax WACC for a firm with a 2 5 % tax rate, a 1 0 % cost of debt, a 3 0

calculate the after tax WACC for a firm with a

25 %

tax rate, a

10 %

cost of debt, a

30 %

cost of equity, and a target debt to value of

0.30 .

Explain how investing to provide the WACC returns keeps the debt and equity investors happy

(

review Chapter

7)

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