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Ronnie's Comics has found that its cost of common equity capital is 16 percent and its before-tax cost of debt capital is 10 percent. The
Ronnie's Comics has found that its cost of common equity capital is 16 percent and its before-tax cost of debt capital is 10 percent. The firm is financed with $250,000,000 of common shares and $750,000,000 of debt. What is the weighted average cost of capital for Ronnie's, if it is subject to a 20 percent marginal tax rate (in percent)?
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