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Company Z provides financial services for its customers. They have debt of $25 million of which they pay $1.2 million per annum in interest expense.
Company Z provides financial services for its customers. They have debt of $25 million of which they pay $1.2 million per annum in interest expense. They have $105 million in common stock at 6%. The companys Beta is 1.15 and the risk-free rate is 2.5%. The tax rate is 40%. What is the cost of debt? What is the cost of equity? What is the WACC?
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