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The AAA Company has a debt to total value ratio of 0.5. The cost of debt is 8 percent and that of unlevered equity is

The AAA Company has a debt to total value ratio of 0.5. The cost of debt is 8 percent and that of unlevered equity is 12 percent. Which statements are correct? Select all that apply.

A

The weighted average cost of capital is 12 percent if the tax rate is 30 percent

B

The weighted average cost of capital is 14.8 percent if the tax rate is 30 percent.

C

The return on assets is 16 percent

D

The return on assets is 12 percent

E

The weighted average cost of capital is 12 percent if the tax rate is 30 percent

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