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Costello Construction Inc. has an unlevered cost of equity is 13.5% with a pre-tax cost of debt of 9%. Both the book and the market

Costello Construction Inc. has an unlevered cost of equity is 13.5% with a pre-tax cost of debt of 9%. Both the book and the market value of debt is $265,000. Earnings before interest and taxes are $149,000 and the tax rate is 34%.

What is Costello Constructions weighted average cost of capital?

(Assume there is no cost of financial distress)

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