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Question 6 . Your company is capitalized as follows Bank loan of 548 at a 12% annual effective interest rate: Preferred Stock of $18 at
Question 6 . Your company is capitalized as follows Bank loan of 548 at a 12% annual effective interest rate: Preferred Stock of $18 at a 14% annual dividend rate: Common Stock with a market cap of $38. You estimate your shareholder's ke cost of equity or required rate of return) is 16%. Your effective tax rate is 40%. What is your after tax WACC? 1135 13.75 05 8.25 1065
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