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CATSDROOL, Inc. has a target capital structure of 65% equity and 35% debt. The firm has a before- tax cost of debt of 8% and
CATSDROOL, Inc. has a target capital structure of 65% equity and 35% debt. The firm has a before- tax cost of debt of 8% and is in the 21% tax bracket. The cost of equity for the firm is 13%.
Calculate the WACC for CATSDROOL assuming they can take full advantage of the tax benefit of debt.
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Roberts, Hamdi Driss
8th Canadian Edition
01259270114, 9781259270116
