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The optimal debt to assets ratio for Ogle Overland Express is believed to be 3 7 % . Il this optimal capital structure is maintained,

The optimal debt to assets ratio for Ogle Overland Express is believed to be 37%. Il this optimal capital structure is maintained, the before-tax cost of debt financing kd (the interest rate Ogle would expect to pay new lenders) should be 6.625% per year and the cost of common equity financing ke should be 11.875% annually (Ogle does not use preferred stock financing). If the company's marginal combined state-plus-federal income tax rate is 23%. what is its weighted average cost of capital, KA or WACC?

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