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(Click on the following icon in order to copy its contents into a spreadsheet.) CoffeeStop primarily sells coffee. It recently introduced a premium coffee-flavored liquor
(Click on the following icon in order to copy its contents into a spreadsheet.) CoffeeStop primarily sells coffee. It recently introduced a premium coffee-flavored liquor (BF Liquors). Suppose the firm faces a tax rate of 30% and collects the following information: If it plans to finance 11% of the new liquor-focused division with debt and the rest with equity, what WACC should it use for its liquor division? Assume a cost of debt of 4.87%, a risk-free rate of 2.82%, and a market risk premium of 5.99%. Note: Assume that the firm will always be able to utilize its full interest tax shield. The weighted average cost of capital for BF Liquors is \%. (Round to two decimal places.)
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