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Please answer both questions. Thank you in advance 11. What is the Weighted-Average Cost of Capital (WACC) for a firm with 40% debt, 10% preferred
Please answer both questions. Thank you in advance
11. What is the Weighted-Average Cost of Capital (WACC) for a firm with 40% debt, 10% preferred stock, and 50% equity if the respective costs for these components are 6%, 8%, and 12%, and the firm's tax rate is 40%? A. 7.76% B. 7.92% C. 8.24% D. 8.67% E. 9.20% 17. A project costs $2,000,000 and will be depreciated to a value of zero using straight-line depreciation over the 20-year life of the project. If the tax rate is 30%, how will the depreciation affect the cash flow of the project each year? A. Decrease cash flow by $100,000 B. Decrease cash flow by $70,000 C. Increase cash flow by $30,000 D. Increase cash flow by $70,000 E. Depreciation is not a cash flow, so it will have no affectStep by Step Solution
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