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Exercise 3 (10 minutes - 22 points): ABC Company has a capital structure consisting of 30% debt and 70% equity. Its debt currently has a

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Exercise 3 (10 minutes - 22 points): ABC Company has a capital structure consisting of 30% debt and 70% equity. Its debt currently has a 9% yield to maturity. The risk-free rate (RF) is 6%, and the market risk premium (rM-TRF) is 7%. Using CAPM, Lacoste estimates that its cost of equity is currently 13%. The company has a 40% tax rate. a. What is ABC current WACC? SA

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