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LSUS Corporation has 80,000 bonds outstanding that are selling at par value . Bonds with similar characteristics are yielding 8.6 percent . The company also
LSUS Corporation has 80,000 bonds outstanding that areselling at par value. Bonds with similar characteristics areyielding 8.6 percent. The company also has 4 million shares ofcommon stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is yielding 4 percent and the market risk premium is 8 percent. LSUS Corporation's tax rate is 34 percent. What is LSUS Corporation'sweighted average cost of capital?
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