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(ii) XYZ has a beta of 1.45. The current equity market risk premium is 7.5%, and the risk free rate is 3.5%. XYZ's before-tax cost

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(ii) XYZ has a beta of 1.45. The current equity market risk premium is 7.5%, and the risk free rate is 3.5%. XYZ's before-tax cost of debt is 7% and its marginal tax rate is 30%. The stock sells at book value. Use the data from this balance sheet to answer the following problems: 250 Assets Cash Accounts Rec. Inventories Net Fixed Assets Total Assets Llabilities & Equity Long-Term Debt 6,423 Equity 1,387 850 2,277 4.433 7,810 Total Liab. & Equity 7,810 (iii) Calculate XYZ's after tax WACC. (5 marks

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