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Consider company ABC that is getting 85% of its funding through bonds and the rest through shares. Its marginal tax rate is equal to 7%.
Consider company ABC that is getting 85% of its funding through bonds and the rest through shares. Its marginal tax rate is equal to 7%. The yield to maturity on its bonds is 5% and the required rate of return on shares is equal to 8%. Calculate the WACC. Show your work. (Write value of WACC in the Answer field in decimals, for example: instead of 12.3% write 0.123; Steps and interpretation you can write in the text box below)
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