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SIROM Scientific has $ 5 million of outstanding equity and $ 1 0 million of bank debt. The bank debt costs 4 % per year.

SIROM Scientific has $5 million of outstanding equity and $10 million of bank debt. The bank debt costs 4% per year. The estimated equity beta is 2. If the market risk premium is 9% and the risk-free rate is 4%, compute the weighted average cost of capital if the firms tax rate is 35%.
A.10.43%
B.9.52%
C.9.97
D.9.07%

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