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CoffeeStop primarily sells coffee. it recently introduced a premium coffee flavored liquor. suppose the firm base is a tax rate of 35% and collects the
CoffeeStop primarily sells coffee. it recently introduced a premium coffee flavored liquor. suppose the firm base is a tax rate of 35% and collects the following information. if it plans to finance 15% of the new liquor focus division with debt and the rest with equity, what WACC should it use for its liquor division? assume a cost of death of 5.2% , a risk-free rate of 2.3%, and a market risk premium of 5.1%
Beta %equity %Debt
Coffestop. 0.61 95% 5%
BF Liquors 0.22 85% 15%
Note: assume that the firm will always be able to utilize its full interest text shield
The weighted average cost of capital is ___ % (round to two decimal places)
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