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Calculate the Cost of Capital for a firm with the following financing structure: 100M in debt with a cost of 8% and 75M in equity
Calculate the Cost of Capital for a firm with the following financing structure: 100M in debt with a cost of 8% and 75M in equity with a cost of 12%. The firm's federal marginal tax rate is 34%. Remember to factor in the after-tax cost of the debt. Assume the equity cost of 12% includes flotation costs.
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