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The ABC Company is planning a $75 million expansion. The expansion is to be financed by selling $40 million in new debt and $35 million

The ABC Company is planning a $75 million expansion. The expansion is to be financed by selling $40 million in new debt and $35 million in new common stock. The before-tax required rate of return on debt is 8 percent and the required rate of return on equity is 12 percent. If the company is in the 30 percent tax bracket, what is the firm's cost of capital? Answer A)8.587% B)9.347% C)6.907% D)10.000%

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