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Sentry Management is a start-up company and borrows $5,000,000 from a bank at 10% interest, then they issue $10,000,000 of common stock at a cost
Sentry Management is a start-up company and borrows $5,000,000 from a bank at 10% interest, then they issue $10,000,000 of common stock at a cost of 8%. What is their weighted average cost of capital (WACC)? Hint: First determine the total capital amount and the percentage of how much of that amount is debt and how much is common stock.
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