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The market value of Charcoal Corporation's common stock is $20 million, and the market value of its risk-free debt is $5 million (this is the
The market value of Charcoal Corporation's common stock is $20 million, and the market value of its risk-free debt is $5 million (this is the only debt that the company has). The beta of the company's common stock is 1.25 and the market risk premium is 8 percent. if Treasury bill rate is 5% and the corporate tax rate is 20%, what is the company's weighted average cost of capital?
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