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QUESTION-1 5+5+ 10- 20 marks) a. Why do firms calculate their weighted average cost of capital? (5 marks) b. How does a firm's tax rate

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QUESTION-1 5+5+ 10- 20 marks) a. Why do firms calculate their weighted average cost of capital? (5 marks) b. How does a firm's tax rate affect its cost of capital? (5 marks) What is the effect of the flotation costs associated with a new security issue on a firm's weighted average cost of capital? (10 marks) c

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