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LAD Corporation has capital structure of 40% debt and 60% equity. The company wants to raise new capital. New debt will be issued at a
LAD Corporation has capital structure of 40% debt and 60% equity. The company wants to raise new capital. New debt will be issued at a before tax cost of 6%. The equity will be provided by internally generated funds. If the required rate of return on the firms stock is 10%, the firms marginal tax rate is 40% and the firm wants to keep the same capital structure. This Corporations cost of capital is
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