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Running Deere firm is considering a target capital structure 35% debt and 65% equity. The cost of equity for an unlevered firm of Running Deere

Running Deere firm is considering a target capital structure 35% debt and 65% equity. The cost of equity for an unlevered firm of Running Deere is 12% and the before tax cost of new debt issued is constant at 8%.

Calculate the Weighted Average Cost of Capital (WACC) for the Levered Firm assuming the corporate tax rate is 35%

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