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Suppose that LilyMac Photography expects EBIT to be approximately $ 2 2 0 , 0 0 0 per year for the foreseeable future, and that

Suppose that LilyMac Photography expects EBIT to be approximately $

220, 000

per year for the foreseeable future, and that it has

1, 000 10 -

year,

9

percent annual coupon bonds outstanding.

What would the appropriate tax rate be for use in the calculation of the debt component of LilyMac

s WACC?

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