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Technico plans to start a new product division that will have a capital structure of 90 percent debt and 10 percent equity. The levered beta
Technico plans to start a new product division that will have a capital structure of 90 percent debt and 10 percent equity. The levered beta for this division has been estimated to be 1.52. What will be Technico's weighted cost of capital for this new division if the after-tax cost of debt is 11.4 percent, the risk-free rate is 9 percent, and the market risk premium is 8.3 percent?
13.00%
12.42%
13.12%
11.09%
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