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Company estimates that its beta is 2.25. The capital structure is 75% debt and 25% equity. Before tax cost of debt is 10 % and
Company estimates that its beta is 2.25. The capital structure is 75% debt and 25% equity. Before tax cost of debt is 10 % and tax rate is 20%. Risk free rate is rRF = 6% and market risk premium (rm - rRF ) = 8%: What is the WACC of the company? Show your work.
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