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Company A has $17 million of outstanding equity and $6 million of bank debt. The bank debt costs 5% per year. The estimated equity beta
Company A has $17 million of outstanding equity and $6 million of bank debt. The bank debt costs 5% per year. The estimated equity beta is 2. If the market risk premium is 6.5% and the risk-free rate is 3%, compute the weighted average cost of capital if the firms tax rate is 30%. Please show all your steps clearly.
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