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The HoH Company is planning a $100 million expansion. The expansion is to be financed by selling $55.0 million in new debt and $45.0 million
The HoH Company is planning a $100 million expansion. The expansion is to be financed by selling $55.0 million in new debt and $45.0 million in new common stock. The before-tax required rate of return on debt is 10 percent and the required rate of return on equity is 15 percent. If the company is in the 25 percent tax bracket, what is the firm's cost of capital?
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