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Reebok has a market cap of $524,000 and a cost of equity of 13%. The market value of its outstanding bonds is $434,000 while the
Reebok has a market cap of $524,000 and a cost of equity of 13%. The market value of its outstanding bonds is $434,000 while the yield to maturity on the bonds is 7%. If the corporate tax rate is 23%, what is Reebok's WACC? for reference the correct answer given is 9.55, Just please provide the steps and work on how to get there.
WACC=(wErE)+[wDrD(1t)] Where: wE= weight on equity wD= weight on debt rE= cost of equity rD= cost of debt t= tax rate
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