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Question GTZ has a cost of equity of 16%. It has two million shares in issue trading at $1.50 per share. GTZ also has $1.2m

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GTZ has a cost of equity of 16%. It has two million shares in issue trading at $1.50 per share. GTZ also has $1.2m of bank borrowings in issue. The pre-tax cost of the bank borrowings is 10 per cent, and the post-tax cost of the bank borrowing is 7%.

What is the WACC of GTZ?

answer: 13.43%.

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