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Given the following information on Javier Delgado. Inc.'s capital structure, compute the company's weighted average cost of capital. Type of Capital Percent of Before-Tax Capital

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Given the following information on Javier Delgado. Inc.'s capital structure, compute the company's weighted average cost of capital. Type of Capital Percent of Before-Tax Capital Structure Component Cost Bonds Preferred Stock Common Stock 40% 5% 55% 7.5% 11% 15% The company's marginal tax rate is 40%. A. 13.3% C. 10.6% D. 10% E. 7.83% 14. Which of the following has a beta of zero? A. The market. B. A risk-free asset C. A high-risk asset. D. Both A and B. 45. When investors increase their required rate of return for a company, its cost of capital increases simultaneously A. True B. False

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