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In the spring of last year Tempe Steel learn that the firm would need to re-evaluate the companys weighted average cost of capital following a
In the spring of last year Tempe Steel learn that the firm would need to re-evaluate the companys weighted average cost of capital following a significant issue of debt. The firm has financed 48% of its assets using debt and 52% using equity. Calculate the firms weighted average cost of capital where the firms borrowing rate on debt is 7.7%, it faces a 35% tax rate, and the common stockholders require a 20.2% rate of return. Temp Steels WACC is ___%.
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