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If we assume that a firms market value of debt is $200, its market value of equity is $800, its cost of equity is 10%,

If we assume that a firms market value of debt is $200, its market value of equity is $800, its cost of equity is 10%, and its cost of debt is 5%, what is its asset cost of capital?

a.

7%
b.

9%
c.

8%
d.

10%

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