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Coffee Stop primarily sells coffee. It recently introduced a premium coffon-flavored liquor (BF Liquors). Suppose the firm faces a tax rate of 38% and collects

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Coffee Stop primarily sells coffee. It recently introduced a premium coffon-flavored liquor (BF Liquors). Suppose the firm faces a tax rate of 38% and collects the following information. If it plans to fnance 12% of the new liquor-focused division with debt and the rest with equity, what WACC should it use for its fiquor division? Assume a cost of debt of 4,9%, a risk-free rate of 2.1%, and a market risk premium of 6.2% Beta % Equity % Debt Coffor Stop 0.03 95% BF Liquors 0.26 88% Note: Assume that the firm will always be able to utilize its full interest tax shield The weighted average cost of capital is % (Round to two decimal places) 5% 12%

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