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Setting Sun Brewery has only common stock and debt outstanding; debt is 40% of capital. Setting Sun pays a 6% yield on its bonds, a
Setting Sun Brewery has only common stock and debt outstanding; debt is 40% of capital. Setting Sun pays a 6% yield on its bonds, a 14% return to stockholders, and pays tax at 25%. Setting Sun WACC is: O 11.2% O 6.2% 6.5% 7.5%
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