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Toothy Company wish to calculate their WACC. Their book value of debt is $3m and the market value is $3.5m, whereas their book value of
Toothy Company wish to calculate their WACC. Their book value of debt is $3m and the market value is $3.5m, whereas their book value of equity is $7m and the company has a Market to book ratio of 2. Return on debt (ro) is 4% whereas risk free is 3%. re based on the CAPM is 10%. If the tax rate, Tc, is 21%, what is the WACC of TOOTHY? A. B. C. D. 6.9% 7.3% 8.6% 9.1%
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