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GHJ Inc. is investing in a major capital budgeting project that will require the expenditure of $16 million. The money will be raised by issuing
GHJ Inc. is investing in a major capital budgeting project that will require the expenditure of $16 million. The money will be raised by issuing $6 million of bonds and $10 million of new common stock. The company estimates after-tax cost of debt to be 7%, and the cost of new common stock to be 17%. What is the weighted average cost of capital (WACC) for this project?
A.) 12.20%
B.) 13.12%
C.) 13.25%
D.) 14.23%
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